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July/August 2014
PUBLIC
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Building Bridges to the Future
Lottery and Retailers connecting to the Consumer
Global Solutions, Custom Crafted
LOTTERY + SPIELO + INTERACTIVE + BETTING
All Together
GTECH is an advocate of socially responsible gaming. For more information visit gtech.com
July/August 2014
PUBLIC
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Feature Interviews and Editorials
www.PublicGaming.com
Subscribe to our new Daily
News Digest. Industry news gets
reported here as soon as it hits the
wires. Gathered from hundreds of
publications, government agencies,
lotteries, commercial firms, and
news wires from all around the
world, www.PublicGaming.com
is the most comprehensive news
and information resource in our
industry. PGRI’s Morning Report
is our weekly electronic newsletter,
providing you with a synopsis of
the previous week’s industry news
PGR Institute is much more than a
news aggregater. We follow-up on
the news to deliver the perspective
and genuine insight you need to
understand the gaming industry and
how it is likely to evolve. Any questions or comments, e-mail Paul
Jason at pjason@PublicGaming.
com or call U.S. + 425.449.3000.
6
Paul Jason: From the Publisher
8
On the New National Premium Game
(Monopoly Millionaire’s Club) and
Governance of the Multi-State Games
Stephen Martino, Director, Maryland Lottery and
Gaming Control Agency
12 Finding a Way to Say “Yes” to
Retail Optimization
Michele Argentieri, Transitional Vice President
Sales, Northstar New Jersey
Beth Bresnahan, Executive Director,
Massachusetts Lottery
Daniel Cage, Chief Executive Officer, Linq3
Kevin Gass, Vice President, Lottery Gaming,
BCLC (British Columbia)
Mark Hagen, Category Manager – Services,
7-Eleven, Inc.
Paul Jason, Chief Executive Officer, PGRI, Inc.
Anne Kerstetter, Store Operations Payment
and Reconciliation Manager
Terry Presta, Executive Director, Kansas Lottery
May Scheve Reardon, Executive Director,
Missouri Lottery
Jeff Sinacori, Vice President Retail Sales
Development, Scientific Games
Susan Strouse, Senior Director, Global Retail
Strategy, GTECH
Bishop Woosley, Executive Director, Arkansas
Scholarship Lottery
24 Mobile Means Growth
Matthew Isaacs, Editorial Manager, Shoutz, Inc.
25 Educating and Engaging Retailers
Just Got Easier
Adam Perlow, Chief Executive Officer,
Hudson Alley Software
28 Use Technology Now:
Ways to Engage Players, Expand Lottery
Marketing Reach and Drive Sales Today
Jim Acton, Vice President of Business Development, Properties Plus, Scientific Games Corporation
32 A Time for Action: Lottery & Retail
Casey McKenzie, Senior Principal Consultant
with Impact 21 Group, LLC
33 Lottery’s Evolution into Omni-Channel Retailing
Doug Pollard, Co-Chief Executive Officer,
Pollard Banknote
34 Chain Reaction: Integrated In-Lane Solutions
Open New Distribution Channels and
Attract New Players
Research by GTECH and real-world case studies reveal consumer and retailer embrace for modernization
39 Converting Players: How Land-Based Retail
Can Thrive in a Mobile World
Cameron Waldie, President of Carmanah Signs,
and Chris Riegel, CEO of STRATACACHE,
the parent company of Carmanah Signs
40 Mobilize Your Lottery Brand to Maintain
Relevance for the Modern Consumer
Results and Insights of a study by Leger,
The Research Intelligence Group, partly
commissioned by GTECH
44 Mapping the Road from GeoSweep
to GeoLotto
Henry Oakes, Co-Founder, Geonomics
45 The New Customer Journey
Fivi Rondiri, Corporate Marketing Coordinator,
INTRALOT
46 Pulse of the Industry:
A Concise Synopsis of the News
www.publicgaming.com Visit our website to get the latest breaking lottery news.
And sign up to receive PGRI’s weekly Morning Report.
Thank you!
public gaming
research institute
Public Gaming International
Publisher & President
Paul Jason
pjason@publicgaming.com
Executive Vice President
Susan Jason
sjason@publicgaming.com
Art director/Designer
Lisa Robinson
Honored Founders
Doris Burke
Duane Burke
Contact Public Gaming
Tel: (425) 449-3000
Fax:(206) 374-2600
Public Gaming International (ISSN-1042-1912) July/August 2014, Volume 40, No. 4. Published six times a year by the Public Gaming Research Institute,
Inc., 218 Main Street, #203, Kirkland, WA 98033, (425) 449-3000. ANNUAL SUBSCRIPTION RATES: United States: $145. Canada & Mexico: $160(US). All
other countries: $225(US). POSTMASTER: Send address changes to Public Gaming International, 218 Main Street, #203, Kirkland, WA 98033. SUBSCRIPTION
REQUESTS: Send to same address. NOTE: Public Gaming International is distributed by airmail and other expedited delivery to readers around the world. ©2014
All rights reserved. Public Gaming Research Institute.
From the Publisher
By Paul Jason, Publisher, Public Gaming International Magazine
media and distribution.
U.S. lotteries are connecting with their
mission as multi-billion dollar marketers
of consumer products like never before.
The spirit of entrepreneurial energy is driving change in every
aspect of the business. Powerball (PB)and Mega Millions (MM)
are now sold in all the lottery states. And in October, most of the
state lotteries will be launching the new National Premium Game,
Monopoly Millionaires’ Club (MMC). This is arguably the most
exciting new game to launch in the history of U.S. lotteries. And,
the MMC has a whole raft of truly exciting and innovative promotional initiatives, like a multi-state TV game show, to position
Lottery for success in the new world of multi-media and social
networking. The U.S. lotteries are taking material steps to ensure
that they continue to thrive in the consumer-centric world of the
future, operating like the multi-billion dollar, market-driven enterprises that they are.
U.S. lotteries are facing similar challenges, but there are significant differences. Most U.S. lotteries continue to focus on the
traditional lottery games, and that is not threatened by regulatory change. But there continues to be well-funded lobbying campaigns directed at convincing the federal government to trample
on states’ rights to regulate and tax online gambling. If successful, the resulting federal legislation could conceivably affect even
traditional lottery. The bottom-line for U.S. lotteries is that, for
a variety of reasons, adoption of the “omni-channel” model is a
slow process.
Not to be deterred from their mission to grow sales, U.S. lotteries
are pushing in all the directions that are available to them. Monopoly
Millionaires’ Club being one shining example. Another is the tremendous inroads that have been made to enhance the relationship with
their retail partners. The vast majority of this issue of PGRI magazine
is devoted to retailing. The “Synopsis of Retail Panel Discussions”
conveys many of the issues and ideas that the industry leaders are
grappling with. Of course, the panelists do not presume to speak for
the entire industry. But they do represent a cross-section of perspectives from the lottery operator, the retailer, and the vendor sides of the
business. It is lengthy, but it has been edited and organized by topic
to try to make it more reader-friendly. You might find that the discussions raise as many questions as they answer, but I would submit that
getting these issues onto the table for serious discussion, is a good
step towards solving problems and forging the most collaborative
and productive retailing strategies.
But, change and progress never happens without the incursion of
unanticipated consequences that disrupt the status quo. The initiatives
to cross-sell both of the big jackpot games in all states, the increase
in the price of PB to $2 a ticket, and now the launch of Monopoly
Millionaires Club are completely changing the face of Lottery in the
U.S. As regards the overall sales of PB and MM, the net impact of
the changes made to date has absolutely been positive. Now, with the
introduction of MMC, the need to apply smart category management
tools to the growing portfolio of multi-state games is becoming more
pressing than ever. Stephen Martino addresses these issues, and
why the Maryland Lottery and Gaming Control Agency voted to join
MUSL (the Multi-State Lottery Association that operates Powerball
at the direction of its members).
I want to thank Mark Hagen (7-Eleven, Inc.) in particular for his
contributions to our magazine, to our conferences, and to the dialogue that is bringing these retailing issues to light, and framing them
in ways that are freeing the industry up to make progress in the way
Lottery operates at Retail. To be sure, Mark is outspoken about the
need for Lottery to raise its game (pun alert). But he strives to deal
with the limitations that make it difficult for lotteries to accomplish
everything that should be done. He has helped us to talk less about
what can’t be done and why it can’t be done, and instead to focus on
what can be done. And to focus on the end-result and think creatively
and collaboratively about how to move the needle towards actionable
solutions that will enable retailers to more effectively drive lottery
sales. Win-win-win-win for everyone.
Industry Days is a closed conference, held every other year, that
is attended by the top leaders of the European lotteries. PGRI had
the privilege of inducting Jean-Luc Moner-Banet and Bernadette
Lobjois into the Lottery Industry Hall of Fame in a lovely ceremony
at the closing night banquet. (Alan Eland, Michael Conforti, Margaret DeFrancisco, and Jim Haynes were inducted at the NASPL
conference last October.) Congratulations to all members of the Lottery Hall of Fame, and thank you for your service to this most worthy
industry! PGRI also had the privilege of moderating a panel discussion titled “Drivers of change that unlock the power of lotteries to
excel in a competitive market.” The panel discussions and presentations at Industry Days reflect the highly dynamic state of the gaming market-place in Europe. Of course, government lotteries are not
well-served by regulatory change that opens the market up to multiple operators to compete for the business (thankfully, though, not
in the traditional lottery segment). The explosion of online gaming
operators is definitely affecting the entire industry in Europe, including lottery. The bright side of this picture is that European lotteries
are moving aggressively to compete in this environment. Mobile is
big, but it’s really about connecting with the consumer on all levels
and through all media in an integrated “omni-channel” approach to
Public Gaming International • July/August 2014
And thank you to all of our editorial contributors! I challenged
them to dig deep to articulate a vision for how Lottery can transform
itself into the benchmark for retailing ‘best practices’, and they delivered in spades.
Lottery Expo will be held at the Eden Roc Resort on Miami’s
South Beach. September 9, 10, and 11. Visit our conference website
www.PublicGaming.org for further details, registration information, and program updates. I hope you can come! u
6
Public Gaming
Stephen Martino
Director, Maryland Lottery and Gaming Control Agency
PGRI Introduction: The last few years have been witness to some dramatic
change in the way the multi-state games are operated in the U.S. Cross-sell in
2010. Raising the price of Powerball to $2 a ticket in 2012. Next up is Monopoly
Millionaires’ Club, perhaps the most important game-launch in the history of U.S.
lotteries. These innovations did not happen without a long-term plan to build on
the success of multi-state games. The planning for additional games, and the
development of new strategies to innovate in all aspects of sales, marketing and
distribution, began prior to the beginning of cross-selling four years ago.
It’s the market-place that is driving these changes. Consumer tastes, behavior, and lifestyles are evolving at breakneck speed that necessitates fast and effective adaptation on the part of all businesses. The complexity of the business
environment, the sophistication of technological infrastructure to support the
business, the abundance of creative, even ‘paradigm-shifting’, game concepts
that are flooding the market, all call out for a serious look at how lottery will lead
the charge into the future, or at least keep up with the changing market-place.
The question before the board is – How can the consensus-building apparatus
and a culture of innovation be institutionalized such that the ability to turn concept into action becomes systemic and the full potential of multi-state gaming
initiatives is realized? It’s a big question with no easy answers. And it will never
be easy to create consensus among 44 lotteries. But one aspect of the question
relates to the issue of “governance,” the infrastructure that facilitates the interlottery communication, research, planning, concept-vetting process necessary
to create and implement multi-state games and promotional initiatives.
The Maryland Lottery and Gaming Control Agency recently joined MUSL
(Multi-State Lottery Association). In so doing, the Maryland Lottery is required
to give up its membership in the Mega Millions consortium. As a proponent of
rationalized governance of the multi-state games, Stephen Martino speaks to
the reasons for this decision to join MUSL and how he expects the Maryland
Lottery to benefit by its association with MUSL.
Paul Jason, Public Gaming: Some
some governance structure. The way we do
directors feel that U.S. lotteries will never
business now is unwieldy, and it stifles in-
operate at an optimal level as long as there
novation. I hope it changes but cannot say
are two separate multi state game groups
how or when it might evolve to manage the
– MUSL and the Mega Millions. Do you
games better and responsibly grow revenue
agree with that?
for each states’ good causes. What I do
Stephen Martino: I agree that having
know is that effective July 1, the Maryland
two separate groups manage two national
Lottery became a member of the Multi-State
jackpot portfolio is an inefficient, cumber-
Lottery Association.
8
Being a huge fan of MUSL, I would think
that is very exciting, both for the Maryland
Lottery and the community of MUSL members. I don’t see why all lottery states would
not want to avail themselves of the full store
of MUSL resources, infrastructure, and
brain trust.
S. Martino: It just made good sense for
Maryland to join MUSL. Lottery is no longer about just selling tickets in a retail store;
the industry is changing rapidly. The business and operational challenges are more
complex, require a more sophisticated structure, and demand rapid technological and
business-process enhancement. The portfolio of games is becoming more diverse,
and we need to push for even faster and
more creative development of new games,
new ways to communicate with our players, new channels of distribution, and fresh
promotional concepts. There is a wealth of
opportunity, along with challenges, facing
lotteries today. The question is not whether
something still works or is adequate to our
needs; it is whether the effort will most effectively, efficiently and responsibly drive
sales and generate revenue for good causes.
I think the MUSL model provides the best
foundation for effectively pursuing new opportunities and new ideas and drive innovation. There are so many things that MUSL
does for its members: its comprehensive
operation; the professionalism of its staff;
and the high quality, thorough information,
research and game concepts that they provide. Taken together, it was a compelling
value proposition for the Maryland Lottery
to pursue membership, and we look forward
to being a beneficiary of these services and
contributing where we can.
MUSL is an innovation and game-producing machine, constantly proposing new ideas
and game concepts, most of them getting
shot down or sent back to the drawing board.
But that’s the way true innovation happens.
The thing is, it takes time and the concerted
application of creativity generating processes, the kind of thing that MUSL does so well.
They have the resources to generate countless ideas for the members to assess and figure out which are the best to develop.
S. Martino: I agree. MUSL has the infrastructure, resources and knowledge to facilitate the development of multi-state games
on the casino side of the business as well
as the lottery side. In fact, the entire sphere
of multi-state gaming operations is one of
MUSL’s core competencies, and that’s definitely relevant to the casino side of our business as well. We are actively looking at joining MUSL’s MegaHits game group, which
would allow us to offer a multi-state progressive jackpot slot machine. We would join
fellow MUSL member lotteries Delaware,
Rhode Island and West Virginia. The casinos
that we regulate are intrigued by the possibility of this option. It is yet another example
of MUSL providing compelling game options to generate sales responsibly that will
increase revenue for good causes. MUSL’s
work on the traditional lottery side speaks
for itself. We’re excited about Monopoly
Millionaires’ Club and what that can mean
to our state, our players and the financial
bottom line. These constitute a couple of the
reasons why the proposal to join MUSL was
unanimously approved by our commission.
Where do we go from here? Will other
Mega Millions state lotteries join MUSL?
S. Martino: It is not for me to say what
other states will do or what they should do.
But I think, hopefully and aspirationally,
that the industry can get its head around the
notion of merging the two groups and having one governing structure for everything
we do. That doesn’t mean that any game
goes away. Mega Millions and Powerball
are two incredibly powerful brands. And
now, the Monopoly Millionaires’ Club has
tremendous promise. As a community of
lottery operators, we need to work together to manage these tent-pole products as a
compelling product category for optimal
overall success. Just think of how much
more effective it would be if everyone came
together around a common table just like
we do at the NASPL meetings. MUSL has
active committees and management groups
for the games it offers. The MUSL structure
enables the various tasks and game management activities to be coordinated effectively and focused to deliver the results the
lottery industry needs.
Some Mega directors might protest that
the Mega Millions and Powerball directors do work together to chart a course to
optimize performance of the two games,
and that the relationship is productive and
works well. Still, wouldn’t the results be
better if the two groups were collapsed into
one group that includes all the lotteries and
manages both games?
S. Martino: The directors from both
groups do work well together. But because
they represent two separate sets of constituent lotteries, the entire industry operates in
a cumbersome and inefficient system. The
fact that there are many shared objectives
does not change the fact that they are two
separate organizations with two separate
memberships. It is challenging enough to
create consensus among 44 lotteries. Our
industry faces more than enough obstacles
to progress and innovation as it is. Many of
those obstacles are not of our making, and
we have no control over them. They are
inherent to lotteries operating within government; our ability to be nimble already
is comprised. So, the least we can do is remove those inefficiencies that we do have
control over. And I would put governance at
the top of that list.
Just as with other lotteries, the mission of
the Maryland Lottery is to maximize revenue
in a responsible way for our in-state beneficiary. In Maryland, that is the state’s general
fund. In other states, it may be public educa10
tion, higher education scholarships or to support senior citizens. In my mind, working with
other states to develop national agendas to
promote the responsible sale of lottery products contributes in a vital way to that mission
of serving our stakeholders. MUSL provides
the means to make that inter-state cooperation
function as effectively as possible.
So you see that goal of optimizing results for your in-state constituents as being served by developing stronger national
programs, promotions, and brand development strategies?
S. Martino: I do think it should be a
priority – where possible, practical and affordable – to develop a more nationalized
approach to marketing the national games.
Monopoly is a broadly popular game in the
United States. Its appeal stretches across
geographical markets and demographic
profiles. Advertising still needs to be controlled by the states, but some of the production costs will be offset by creating
templates that could be used in all markets.
And that hopefully will contribute to a
commonality to the brand image as people
travel throughout the country or are otherwise exposed to multiple media markets
and messages. So, to your question, I think
that building a national presence and brand
image is an important part of the plan for
Monopoly Millionaires’ Club.
How vital is the television game show aspect of Monopoly Millionaires’ Club?
S. Martino: I think it is a compelling
selling point of the game. This industry
needs fresh approaches to add to the traditional lottery concept and the traditional
ways of promoting lottery products. Monopoly Millionaires’ Club has components
that are quite different from Powerball and
Mega Millions that will appeal, we hope, to
new players. We can all do a better job of attracting people who don’t currently play the
lottery. Accomplishing that is one of the primary objectives of Monopoly Millionaires’
Club and the TV game show.
Success is never guaranteed. But considerable thought and consideration has
been put into all the elements of this, which
makes us excited about the possibilities and
confident that it will contribute to our sales
in fiscal year 2015, which runs until June 30
of next year.
…continued on page 22
Finding a way to say “Yes”
… to Retail Optimization
Retailers are the face of the Lottery to the consumer, and thankfully they are committed
to the success of Lottery. Commercial Retail Executives from major chain stores discuss
what Lottery can do to earn this commitment and improve sales by engaging the full support of their Retail partners.
Following are some of the topics as addressed by panelists at PGRI Smart-Tech in New
York City. The video-recorded panel discussions can be viewed at www.PGRItalks.com.
 Building standardizing report formatting and
longer lead-times for our Retail Partners to
better engage with Lottery’s promotional
action-plans
 Integrating the internet into the sales,
marketing and promotional agenda
 The Corporate Retailers’ View on “Ask for
the Order”
 Why the lines of communication require such
a long lead-time
 Exceeding Plan by Focusing on Execution
 Could the request for standardized reporting
formats turn into a requirement?
 Cross-Promotional and Couponing with
Corporate Retailers
 Getting more involved in the strategic
planning processes of our retail partners.
 On Store Visits from LSR’s
(Lottery Service Representatives)
On data collection, consumer profiling, and
proving up our claims that Lottery is a profit
generator for our retail partners.
Mark Hagen, Category Manager – Services, 7-Eleven,
Inc.: Thank you, Kevin. That’s correct. Our planning for any product category starts with understanding the guest. We have information on who purchases lottery from us, just like we do in all other
categories. But other CPG suppliers give us lots of information
about the consumer of their specific products. And together we
adjust the product and promotion mix to appeal to the particular
demographic of each individual store. The types of games in the
stores should be an assortment that appeals most to that specific
store’s demographic profile. 7-Eleven has more than 7,600 stores
in the U.S. alone with different demographics. So by definition,
the assortment of games should not be the same in each store. You
should be capturing and sharing more information with us so that
together we can make sure we are offering the assortment of games
that will optimize the sales potential for each store. Information
about how the demographic profiles differ by product and price
would help us to tailor the product mix of each store to the consumers who frequent that store.
I would also like to compliment May Scheve on your presentation because it may be the first time I’ve heard a lottery talk about
the guest, the consumer.
Kevin Gass, Vice President, Lottery Gaming, BCLC
(British Columbia): We are good at sales reporting internally.
And we can tell the retailer the amount of sales at their location
and all those kinds of things. But the retailers already have most of
this information. What we are not doing is translating our data into
forms that are useful to the retailer. That’s a huge gap for us. When
we sit down with our key accounts, the 7-Elevens of the world,
they talk about basket size, driving incremental sales, segmenting
players in terms of buying patterns and the kinds of products ( in
our case, it’s lottery games) that appeal to specific demographic
profiles. The other CPG (Consumer Packaged Goods) suppliers
are all talking the retailers’ language and we’re just not in that conversation. We need to be if we expect retailers to give attention to
the business of promoting and selling our products. We do not do a
good job of helping our retailers understand the lottery consumer,
how our products fit into their business model, how the lottery
category can be leveraged to drive sales of other products, etc. It is
a personal priority of mine for us to get there. I think that is a lost
opportunity to generate lottery incremental sales.
Kevin Gass: Retailers ask us why they should carry our prod12
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May Scheve Reardon, Executive Director, Missouri
Lottery: Lottery is a multi-billion dollar business. We need to act
like one. Mark, did you say the big CPG suppliers give you an
annual plan, that you know everything, or most of what they are
going to do, a year in advance?
ucts. They point out that all their other products carry a higher margin and are easier to sell. We may tell them how Lottery generates
store traffic that buys other products and insist that the calculus for
the profit generated by Lottery should include all those factors. But
we don’t have the concrete data to support those claims. We know
it’s true, and the retailers may even observe that it’s true, but they
are used to analyzing hard sales data, with detailed analyses that
profile and segment the product preference of different consumer
groups, to guide their decision-making and merchandising tactics.
And they need hard data from us to inform those decisions. Other
CPG suppliers provide retailers with copious amount of research
and data to support their claims that their product should be given
top-shelf treatment. We need to do the same to get proper consideration for lottery products. Just putting bar codes on our tickets
would be a good start in the effort to capture the data we need.
And we need to give retailers longer lead-times. We have got to
re-engineer our back-end IT and marketing processes to meet even
the basic expectations of our retail partners.
Mark Hagen: We always start out with an annual plan. And
we are always given at least six months for new product launches,
promotions, and other communiqués that store managers need to
know about.
May Scheve: Talk about the chain of communication, and why
you can’t just send e-mail circulars to your stores advising them of
the current product launches and promotions?
Mark Hagen: 7-Eleven just does not operate that way. We
couldn’t operate that way. Think about it. My own world may
be lottery centered, but that’s definitely not the case for all of
7-Eleven. Each store has over 2,500 products and there are over
50,000 stores world-wide. We have a whole internal communications department which sorts out the huge volumes of marketing
and promotional information and consolidates it into a form that
is actionable for our stores. That is then communicated to the field
consultants who in turn instruct the store managers on what to focus on during that particular week. That’s why we have such a long
planning cycle and such rigorous gate keeping. Our CPG suppliers
work with a minimum of six-month lead-times. If Lottery could
get into that cycle, then the process takes care of itself and we have
very effective communication. If we try and work around the process by accommodating a shorter lead-time, then it unfortunately
doesn’t work well.
It’s definitely a missed opportunity. Last year, we worked closely
with California when Powerball launched. 7-Eleven has 1,500 stores
in California. We started working on that launch several months
ahead of time. If they had come to me the week before it was launching and said, hey, by the way we’re turning Powerball on, I would
have had to say “Well have fun. Hope it works out for you.”
On building standardizing report formatting
and longer lead-times for our Retail Partners to better engage with Lottery’s promotional action-plans
Mark Hagen: I realize that the exact product mix and other
aspects of the business vary from lottery to lottery. But there is no
reason you could not standardize at least some of the formatting
and speak with a single voice. If you do that, we can apply our
resources to crunch the data, integrate it with our own data, and
share the results back with you. The benefit to lottery in terms of
enabling us to collaborate with you on the mission of selling more
lottery tickets is huge.
To put it bluntly, pushing these reporting issues over the goal
line is a top priority for us. We need to get that done. Data needs to
be organized for it to be useful and actionable. We have a standard
way of doing business with every other product category. It just
doesn’t make sense, for Lottery or for us, for you to be producing
reports in thirty-three different formats. For one thing, it requires
us to have sixteen accountants just to keep up with it in the most
basic fashion, which makes it un-actionable. But I am encouraged.
There is an XML standard that was developed through NASPL.
May Scheve and NASPL and others are meeting with me to adopt
that standard. I hope you will all support this effort and move this
initiative forward.
Realize too that at the end of the day, I’m here because we support
the lottery category. It’s important to us. The question is how we
can do more business together. We share data with all of our major
suppliers, and I can tell you that it helps to drive sales. Help us get
a clearer idea on what products are selling, what promotions are
working, how performance of each product varies by store and consumer profile, etc. For instance, if you run a buy six get a $2 quickpick ticket, we can tell you where it’s working and where it’s not.
Kevin Gass: Clearly we need to meet these needs. If we as an
industry want to be taken seriously and be given the same consideration as the Cokes and the Pepsis and the other 2,500 products
that are being sold in the store, we have to change our model to
work within that system that Mark has just outlined. If we don’t,
we’ll get the” best of luck to you guys” response.
Could the request for standardized reporting formats turn into a requirement?
Paul Jason, Chief Executive Officer, PGRI, Inc.: Is there a
point at which your requests for things like a longer lead-time could
turn into a required condition for doing business with 7-Eleven?
Mark Hagen: The answer is ‘not yet.’ But stay tuned. We’re
trying to be kind and gentle and work cooperatively to get everyone on board. But if that doesn’t happen there may come a day
where the dialog will change, and we’ll need to institute more
uncompromising systems and requirements. For instance, I also
On why the lines of communication require
such a long lead-time
14
manage publications, newspapers and magazines, and we’ve been
trying to get them to change some of their methods. In January this
year, we sent them a notice that said enough talk and mandated
that on May 5th we begin a new way of doing business. Some are
okay with it and some are not. The ones that do not comply will not
have their paper in our stores. That is not the route that we prefer
to go, and I can say that it is much more efficient for everyone
for these changes to be made on your own terms rather than in
response to customer fiat.
that include driving store traffic that buys higher-margin products,
and how Lottery fits into the ultimate objective of creating a better
guest-experience.
We sell Lottery in thirty-three different states. So we deal with
thirty three different lotteries. Even though the product mix varies
a little, there should not be thirty-three different stories to tell, thirty-three different hierarchies to deal with on every level of business and marketing communications. You should work together to
consolidate your story into a more coherent, strategic, and actionable presentation that enables us to understand how you think Lottery will contribute to our goals and how we can work together
towards mutually beneficial goals.
Bishop Woosley, Executive Director, Arkansas Scholarship Lottery: If we ever hope to do business with the big retailer in my state of Arkansas (Walmart), I can say that they will
almost certainly require compliance with upgraded reporting standards from Lottery.
Terry Presta, Executive Director, Kansas Lottery: Mark
was just referring to the way in which the managers in different product categories vie for attention from the retailer, for better shelf-space
and more promotional resources for their particular brands. Retailers
want to know how each product category, like snacks or cigarettes or
Lottery contribute to the guest-experience and overall performance
of the store. I think that we could do a better job of helping our retailers understand the role of lottery if we sold it as a product category.
For instance, a few weeks after I started as director (January 6, 2014),
our LSR and I visited one of our retailers to tell them the exciting
news that we were increasing the number of games from twelve
to twenty games. I expected them to be happy, assuming that they
would feel that increased consumer choice leads to increased sales
and profits for the store. Instead, they had mixed feelings because of
the increased costs of managing more inventory and such. I think as
an industry that we need to overcome that kind of negative perception
of our product. And instead of twelve or twenty products, we need
them to think of Lottery as a single category of products. Unless we
formulate some smarter ways to present our product as a category,
retailers will never appreciate the profitability of Lottery, the power
of Lottery to drive store traffic and sales.
Doing more advanced planning and building a longer lead-time
is a top priority for us right now. We will be meeting with our retailers, particularly our corporates, to build an annual planner. It is
not realistic to think that our whole product launch, promotional
schedule, and all the details of implementation can be set in stone a
year in advance. It is, though, reasonable for retailers to expect us
to at least try to apply a longer time-line to our plans, and to shape
it into a form that they can use. So we are already working to make
that happen.
On getting more involved in the strategic
planning processes of our retail partners.
Mark Hagen: Other consumer marketing companies are much
more directly involved with 7-Eleven in the strategic planning process. We meet with all of our major suppliers to put together an annual plan, which includes the mechanisms to monitor and measure
performance and drive execution. We share our corporate plans and
strategies, our views on consumer trends, etc. And, they share theirs
with us. Armed with that information, in January we have our big
annual conference for 5,000 franchisees where we share our overall
direction for the company. Keep in mind that each store has 2,500
items. The franchisees have 10,000 they can choose from. They rely
on data to help them choose the right ones. Suppliers who provide
that data, research, and other information are more successful at
differentiating themselves and their products, and thereby gaining
more attention from the individual store managers.
Paul Jason: What do lotteries need to do to have a voice in that
planning process?
Mark Hagen: Try to work together and speak to us with a singular voice. If you could consolidate your story, and back it up with
data, we could give you the opportunity to directly tell our franchisees your story, let them hear the value of lottery. To be candid,
not all of our franchisees have a positive view of lottery. And, so, if
you have an opportunity to directly communicate to them, it would
likely enhance their understanding and perception of Lottery.
Paul Jason: Suggestions on how Lottery can improve its approach, to create a better narrative, tell a better story?
Jeff Sinacori, Vice President Retail Sales Development,
Scientific Games: I agree, Terry. Our retailers do not always
think of Lottery as a category. Some of the retail chains are generating $25 million in profit from lottery products and Lottery is
still not considered a category. Scientific Games has been working
hard to change that. We meet with the retailers to learn more about
their needs and to educate them on the role that Lottery performs for
their businesses. Corporate chains are building $8 million stores. If
we fail to communicate the full benefits of our products, how and
why should they be treated as a category that contributes millions in
Mark Hagen: First, it’s really about execution and having the
data and facts to support your story. Most lotteries need to improve on many of the basics, like giving us more advance notice
of product and promotional launches, and visiting our store more
frequently to make sure we are stocked with the most current product. But to your question, Lottery needs to find ways to consolidate
your message, your strategies, your data, such that we can understand what exactly you think are the best ways to grow the lottery
business, how the lottery business fits into our broader objectives
16
profits and multi-millions in residual sales from increased store traffic? Developing that relationship with the C-store chains is critical,
and I applaud the lotteries for inviting us to be a part of the effort to
actually go in there and talk to them about what their needs are and
how we can help them accomplish their objectives.
point of view as expressed by Mark. And we need to apply the ideas
that Terry, Jeff, and David talked about. These are all pointing us
towards a productive path to forging a true partnership with retailers– both corporate chains and independents. We are all developing flexible merchandising solutions at retail to attract new players. We need to attract their attention, capture their imagination,
and make it easy for them to start playing. As Mark pointed out, much of it is basic blocking and tackling,
making sure the right games are properly stocked and displayed. We’re piloting several strategies including menu boards and menu
mats to optimize the effectiveness of in-counter displays and help
people shop our products. It’s about optimizing every piece of real
estate that we work so hard to garner including solutions that organize games by families, or give them added attention in promotional towers, like end caps in grocery stores. Maybe price-points
should not be the only way to organize our games. We are doing many pilots to determine how to attract that new
consumer. And we are partnering with corporate chains to leverage
their loyalty programs and develop co-op couponing promotions—
not just building our own loyalty programs but building what we
call chain score-cards that essentially integrate our annual product
and promotion plan with their annual chain agenda. You might think
of as a combined scorecard action plan. We want to partner with
our retailers on everything from loyalty to merchandising to crosspromotions. And to Mark’s point, we are working very hard to put
together an annual calendar so our retailer partners have the lead
time they need to execute. We’re not where we want to be, but we
are working hard to get there and share our successes and learning
with all lottery jurisdictions. In fact, GTECH is sponsoring a retail innovation workgroup, working with our customers as part of a
comprehensive company-wide retail business develop plan.
Paul Jason: Mark, what can Lottery do to get the managers to
raise the profile of lottery products in the stores?
Mark Hagen: Lottery LSR’s tend to focus on tactics. Where to
put the POS and what the current promotions are, asking us to upsell, wanting to talk about on-counter displays, etc. 7-Eleven and
our other suppliers focus on mission and strategy before tactics
and details of implementation. For instance, store design and modernization is very guest-centric. We do a huge amount of consumer
research to find out what our target guest is looking for. And that
is done in conjunction with all of our major partners. The executives in the soft drink business, snacks, hot food, cigarettes and the
other major categories, provide input based on their own research,
and they work hand in hand with us on creating store designs that
will optimize the guest experience. These companies do extensive
research and give us comprehensive reports and analyses, backed
up by hard data that help us to understand consumer behavior and
the shopping experience that informs the store-design process. The
research and data provided by our suppliers guide us in our efforts
to appeal to our target customer.
Daniel Cage, Chief Executive Officer, Linq3: One thing
that Mark is pointing out is that our ability to meet the needs of the
retailer depends on our understanding of the guest, the customer.
We need to acquire a better understand of the different customer
profiles, the variety of different buying motives and shopping behavior. There’s the core customer who comes into the store to buy
lottery tickets and also ends up buying additional products. There’s
the customer who comes into buy milk or snacks or cigarettes and
their attention is drawn to the promotion of lottery tickets and so
makes a spontaneous purchase of a lottery ticket. There’s the person who just stops to buy gas without the intention of coming into
the store and so the goal is to get them to come into the store to
make additional purchases. There’s the casual player who plays
for the jackpot or some other lottery promotion but on a sporadic
basis. We need to appreciate the different needs of these different customer profiles, and create a guest experience that appeals
to their specific needs. And we need to work more closely with
our retailers to better leverage the tremendous consumer appeal of
lottery to engage these different customer groups, to address this
wide variety of buyer motivations and consumer behaviors with
innovative solutions. They all respond to different approaches and
we want to apply all of them to maximize the appeal of Lottery to
all the different kinds of consumers. That’s how we will grow the
payer base. We need to communicate to our retail partners just how
and why our goals are aligned. We want the same thing so let’s
work together to make it happen.
On Implementing Multi-State Promotional
Collaborations with Corporate Retailers
Susan Strouse, Senior Director, Global Retail Strategy,
GTECH: If regional lotteries got together to offer you a program
that could run across multiple states simultaneously, do you see an
opportunity to do more advertising? Could your regional circulars
and other communiques drive higher sales? Do you have any CPG
partners working this way today and, if so, could you share the
pros and cons and challenges to this type of broader scale promotional execution?
Mark Hagen: Yes. The answer is yes, absolutely. We would love
that. We do this type of a program all the time with our CPG partners. And I know this is probably a crazy thought, but if there were
a common scratch ticket that were a cool licensed scratch brand that
we could sell in all thirty-three states that we sell lottery in, you
would see some unbelievable execution in 7-Eleven stores. I know
you’re thinking that is not possible. But you did it with Powerball
and Mega Millions, so why can’t you do it with Scratch? And when
the scale goes from one state to thirty-three states, the stakes change.
Suddenly we have advertising and point-of-purchase assets that are
available to us, resources that are very hard to get when you’re just
Michele Argentieri, Transitional Vice President Sales,
Northstar New Jersey: I think we all appreciate the retailer
18
talking about one state. You want a store-front banner or a window
sign or some other special form of promotional or POS initiative?
Won’t happen on an individual state basis. But if the ROI for us is
increased by deploying it across all thirty-three states, that’s when
our system and resources can get behind it in a big way. And yes,
we’d love to see something like this.
Example—Last year PepsiCo developed, after extensive consumer research, a special flavor of Gatorade for us. It was launched
with storefront banners, window signs, and promotional push. And
out of the couple hundred in our vault it became the number three
best seller. So when we get behind something like that, we can
move a lot of volume.
Anne Kerstetter, Store Operations Payment and Reconciliation Manager: I agree with Mark. The same applies for
Wawa except that we do not operate in thirty-three states. But the
principle applies to us the same way it applies to 7-Elevan.
Integrating the internet into the
sales / marketing/ and promotional agenda
May Scheve: How can we work together on an internet marketing strategy that works well for both of us? Thinking of internet
as a channel for communication and promotion more than as a
channel for distribution.
Mark Hagen: There’s a number of different ways we can participate. Online marketing is a huge priority for us. And we’re
looking for suppliers and partners that want to work with us on
online marketing. So, there may be an opportunity for us to work
with the Lottery on some joint, online-marketing initiatives. When
we design a store now, we do it with an objective of appealing to
more women and younger people. We are trying to create a physical environment that makes them feel good about just walking in
to the store. That’s one of the reasons that you don’t see cigarettes
all over the sales counter like you used to. We did research and the
consumer said they do not like buying food, which is our priority,
from a place that has cigarettes all over the sales counter. That is
actually one of the reasons we don’t like on-counter lottery displays. We got the same feedback that, for women, this is not the
kind of environment where they want to come and buy food.
Women and Millennials are doing lots of business online. If we
could work together to find a way to not only facilitate an internet
lottery transaction but also bring them to our store to try one of our
food items, then you are helping us get a very high priority target
customer to walk in the door. We should talk about how we can put
together some joint promotions to accomplish that.
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Michele Argentieri: It’s about distribution and visibility. So
if I can push a ‘buy something, get something free’ coupon to
someone who’s going into 7-Eleven, that’s about visibility of the
retailer’s product. Our Business Plan is focused on new avenues
of product visibility that supports distribution. By integrating the
goals of the retailer, I think we are redefining the meaning of visibility and distribution as it applies to Lottery. it is ironic to be on this panel because our objective is simple and
low-tech. We strive for the product to be presented in a clean, fresh
way; for the benefit of the existing customer who may know what
they want, or the new customer walking in for the first time. We
want them to see what they want, have an opportunity to choose
from an array of games, but not be overwhelmed by them. We
work with our 7,400 retailers, on a case-by-case basis, by applying
the basic tactics that we have found effective at helping our retailers maximize the opportunities in their specific locations.
Paul Jason: Michelle, do you have cross-promotions where
you produce a coupon or something that delivers value to the retailer in the form of a discount on a food product or something?
Paul Jason: The Massachusetts Lottery has the highest percentage of retailers per capita and the highest lottery sales per capita in the country. Maybe the two are related? It seems that executing well on the basics is itself a good recipe for success. And even
with this extraordinary penetration, you continue to drive sales
increases. And with a minimal advertising budget at that.
Michele Argentieri: In Indiana, we’re partnering with one of
our major chains, and they are giving away their proprietary water product in a ‘buy X get Y.’ Buy a lottery product and get a bottle
of their water. And vice-versa, buy a private label product and get a
lottery ticket. We are working on co-op marketing planning strategy to try to do a win/win for our retailers. These are all pilots, tests
to see if we can move the dial. These are the kind of partnerships
that we feel moves us in the direction to which Mark Hagen refers. Beth Bresnahan: When my predecessor, Paul Sternberg, took
over the Mass Lottery back in 2011, we were at a crossroads. Our
sales had been in decline and we were viewed as a mature lottery
with no room to grow. We proved that wasn’t the case. We had a
$1 million gain in sales in the first six months. Our next year was a
record breaking year. Last year was another record breaking year.
We did $4.85 billion in sales using our existing footprint and our
existing products. So there was room to grow even within all of
our constraints. We recognize that we need to upgrade our technology, look to the future of online gaming, and how to modernize the product. But we’re not waiting for new technology or new
channels of distribution or increased advertising budget to drive
growth. There’s a lot of room for growth where we are right now
and with the tools we have right now. We will continue on the path
we are on.
Paul Jason: Daniel, the Link3 concept displays an offer to buy
a lottery ticket at the pump. Can that display be used to promote
other objectives, like go into the store for a discount on a hot dog
or other food items?
Daniel Cage: Certainly. And we are doing that. It’s what you
were saying, Michelle and Mark. One objective is to optimize the
shopping experience for the current customer. The other objective
is growing the customer base, attracting new customers. That’s as
true for the retailer as it is for Lottery. Just as GTECH, Scientific
Games, INTRALOT, Pollard, and others are introducing innovative
ideas to forge creative merchandising partnerships with the retailer,
Linq3 is trying to forge a better connection with the customer who
is outside at the pump and not necessarily even intending to go into
the store. We have a lot of flexibility to use the displays at the pump
to stimulate the customer at the pump to go in to the store. It could
be ‘buy X, get Y’, or ‘buy Powerball and get an instant ticket.’ The
retailer benefits by driving more traffic inside. There are lots of different things you can do depending on store type and objectives,
your store’s customer profile, short or long-term merchandising and
promotional strategies. Let’s connect better with all of these segments, the Millenials, women, internet shoppers, new players – and
apply all these concepts to drive store traffic and increased purchasing from the whole spectrum of consumer profiles.
The Corporate Retailers’ View on
“Ask for the Order”
Mark Hagen: It is unlikely that we’re going to ask our sales associates to plus-sell a lottery ticket. We have enough of a challenge
to plus-sell anything. And if we get them to plus-sell something,
they’re going to plus-sell food or proprietary beverages, not something that we make a 5% margin on. Sorry, but that’s the way it is.
That is why we like in-counter displays, right under the nose of
the customer when they are at the counter making their purchase.
That is the way to sell Lottery—it will sell itself, and we have the
data to prove it. We’re going to ask you to partner with us to make
sure Lottery is effectively merchandised and in-stock and we’re
confident that’s going to sell more lottery tickets.
Exceeding Plan by Focusing on Execution
Beth Bresnahan, Executive Director, Massachusetts
Lottery: What Michelle said about visibility is key. If we’re out
of sight, we’re out of mind. For us, it’s all about in-store visibility.
We are using a 17-year-old system that does not have ‘buy X get Y’
capabilities. So we are depend on fundamental execution, keeping
lottery products front and center, and maximizing the opportunities with the lower performing retailers by using the gold-star retailers as models for them to emulate. A ‘best practices’ approach.
In terms of modernization and the application of new technology,
Anne Kerstetter: I have to agree, particularly because we
only sell in a self-serve format so we don’t get that opportunity to
directly ask the customer for the sale anyway. So we really need to
work with our partners to get the right promotional materials out
there, the right point of sale materials that’ll grab that customer’s
attention, that will effectively “ask for the sale.” And to emphasize
the point, though, I would agree with Mark that any up-selling
would be applied to other products, not Lottery. That doesn’t mean
20
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World Lottery Association
Lange Gasse 20
P.O. Box, CH-4002 Basel
Switzerland
Phone: +41 61 284 1502
Fax: +41 61 284 1350
world-lotteries.org
Lottomatica
Viale del Campo Boario, 56/D
00154 Roma
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Phone: +39 06 518 991
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lottomatica.it
that lottery’s not important, just that we have to apply the merchandising and selling resources appropriate to the product.
Susan Strouse: What could lottery do to integrate cross promotion, couponing, loyalty programs, and more effective planogramming into their relationship with U.S. retailers?
floor waiting on our customers. So we like to know that our retail
partners will help those managers understand the business, understand where the growth potential is, and understand how they could
better merchandise and market the product. The LSR’s for our stores
do a good job. But I do think there are areas of opportunity to build
a better relationship with the individual store management teams to
make sure that they fully understand the benefits of driving lottery
sales and what that will do for our customers and store traffic.
Anne Kerstetter: Couponing should be targeted to a clearly
defined consumer group so that it can deliver something meaningful to that group. Lottery needs to get more insight into the way in
which its customers can be segmented into more clearly defined
demographic profiles. That is how you will be able to formulate
strategy and promotions that appeal to your customer. Integrate the
couponing with your own Loyalty Programs, and with our products as well. And it would be great if we could refresh some of
the coupon tactics. Pictures and passing out coupons certainly still
work great. The redemption rate continues to be phenomenal. But
I think we need to start looking towards something more fresh and
new, perhaps futuristic methods of communicating to appeal to the
Millenials and attract new customers for both Lottery and Retailer.
Mark Hagen: One thing that the lottery representatives could do
is to be very aggressive about getting us out of what is not selling.
Our store managers won’t do that for two reasons. If they have paid
for them, they won’t remove them until they’ve sold. And two, they
manage over 2,500 products and are not in the best position to constantly assess the performance of each individual lottery ticket. You
may not like taking the tickets back but the result would be that we
would sell a lot more new tickets if you were proactive at moving us
out of the slow-sellers and into the more popular games.
The other thing that could be done is what Ann pointed out: increase the number of visits from LSR’s. Some stores see an LSR
every week, which is great, but in some lotteries it is more like once
a month. You can imagine which stores sell more lottery tickets.
Mark Hagen: We have worked with any number of you on
some cross-promotion and couponing ideas. We’re big fans of that.
The broader the scale we can do it, the more impactful the initiative will be. The only ask we have is that Lottery understands our
goals and integrates them into the equation. We have specific ideas
for what products a couponing initiative should promote. Help us
support our objectives, and you will sell more lottery tickets.
Anne Kerstetter: Too, it is great when the LSR comes to the
individual stores armed with that store’s sales information. Not just
the corporate outlook that the lottery and our own headquarters tends
to focus on, but that specific store’s sales information. They have a
very open dialog with the mangers of those stores and it really has
helped engage those managers in understanding their own business
operations and knowing what products should be replenished and
what products are moving slowly and so should be removed. Our
lottery suppliers have a great return policy, so they can get the stale
tickets out of there. The lottery customer is smart, they know what
ticket they want, they know what prizes are left, they know what
they’re going to come in there and buy, and if it’s not there they’re
probably not going to buy anything as far as lottery goes. Like Mark
said, we really rely on the representatives that are coming into the
stores to help them understand the best way to manage it. u
Cross-Promotional and Couponing with
Corporate Retailers
On Store Visits from LSR’s
(Lottery Service Representatives)
Anne Kerstetter: CPG managers that service our stores typically are driving their product through the stores through merchandising and working hand in hand with the managers of the stores.
While we certainly like our store management teams to understand
the products that they sell, their time is best served out on the sales
Stephen Martino Interview … continued from page 10
You mentioned that many aspects of advertising and promotion will, of necessity,
always be implemented on a state-by-state
basis. I know there are lots of reasons why
each state needs to control its media communications content and delivery. But some
things, like a TV game show that depends
on large scale to manage production costs
for each lottery, and for media contract
negotiations, really require big, nationalmarket scale. I’m hoping that the process
of figuring everything out for the Monopoly
Millionaires’ Club and its TV game show
might spawn new ideas, new ways to think
about the whole concept of national advertising and create a fertile foundation
for new approaches to overcoming the obstacles to national advertising and promotion. Maybe even help in the areas of data
collection and reporting that retailers are
demanding. And standardization of some
aspects of distribution infrastructure to
meet the needs of a Walmart.
22
S. Martino: I hope and expect that the
innovative things being done for Monopoly Millionaires’ Club will be informative
and educational and that the experience
will stimulate fresh ideas for other games
and promotional strategies. Not everything
will be as successful as planned. But if we
plan carefully to manage our risk and set
reasonable expectations, we will continue
to grow and prosper. That’s the way progress happens, and, as far as I can tell, there
is no other way to drive progress. u
year until 2016.3 Brands are realizing that mobile is one of the best
places to connect with customers, and as lottery players look to their
phones for the winning numbers and news, lotteries can offer advertisers incredible access to an enormous player base.
LotteryHUB has already tested and proven its potential for success with national brands. RedBox, the video-rental vending machines outside of convenience and grocery stores, ran ads on the
LotteryHUB app to promote the film Riddick to the lottery-playing audience. Following their campaign, in which video ads were
shown just before LotteryHUB’s live-streamed Powerball drawings,
that movie was the number one rental from RedBox machines.
That kind of success is indicative of the power of mobile advertising
to scale up marketing efforts and get in front of more customers who
are likely to recognize and engage with your brand. With more than
240 million mobile devices registered in the U.S., LotteryHUB can get
advertisers in front of their customers before they’re
at the register.
By Matthew Isaacs, Editorial Manager, Shoutz, Inc.
When lottery players visit a retailer, they’re 45 percent more
likely to buy a soda and 54% more likely to grab a candy bar or
pack of Skittles. Lottery players buy 60 percent of their tickets in
convenience or grocery stores, and when they walk through retail
doors two to four times each week, they’ll spend 70 percent more
on average than non-lottery players.1
There’s a reason (a good one) why retailers have been resistant to
the idea of lotteries taking advantage of new technology—lotteries
moving online could cost them business. But it doesn’t have to be
that way. In fact, taking lottery marketing online but leaving ticket
sales up to brick-and-mortar businesses will be a whole lot easier
and more lucrative for everyone involved.
Right now, the lottery industry stands on the edge of a very exciting new era—the mobile era. Mobile means growth. It means
engaging with customers in a new way and on a new level, and it
means finding new revenue.
Perhaps best of all, however, is that mobile doesn’t mean the end
of the great retail partnerships that have formed in the past 60 years.
In fact, the opposite is true. Mobile strategies can not only help lotteries form new and stronger relationships with players, but retailers
can also leverage those relationships to increase foot traffic and sell
more merchandise.
Sell more tickets and sell more stuff along with them. Why do
you care? Because for the first time, lotteries can take advantage
of a new revenue stream in digital advertising. With more annual
revenue than the film, music and video game industries combined,
the lottery is massive and mainstream, making it the perfect target
for advertisers in any industry.
Even better, lottery players buy every ticket with their jackpot shopping list in their back pocket—every time a player buys a ticket, they’re
in a buying frame of mind, and that’s a valuable time for advertisers
to reach their customers. For decades, lotteries have paid brands hundreds of thousands in licensing fees to print recognizable imagery on
tickets and hopefully boost sales. Essentially, that’s paying a brand to
advertise for them, but it could be the other way around. “[Advertisers]
should be writing the checks to you,” says Shoutz President Brad Duea.
“We have a way for national brands to engage with the lottery player.”
U.S., advertisers spent about $46 billion on digital and mobile ads
in 2013,2 and that figure is expected to grow quickly over the next
year. Mobile advertising is the fastest-growing ad sector, growing
81 percent last year and at a rate seven times faster than desktop
ads; mobile is expected to grow by an average of 50 percent each
Perhaps the best part of a new partnership between lotteries, retailers and great tech
is that it doesn’t need legislative approval as long as tickets are
still the ink-and-paper variety. When you’re funding good causes
for your state, you’re working for the public. That means oversight,
and what better way to please the watchdogs than increasing returns
without upsetting sensibilities.
Whether it’s education, the environment or support for senior
citizens, every ticket is helping someone in your state—and mobile
means growth for good causes, too. Marketing is all about getting the
right message to the right customer at the right time, and advertising on mobile allows us to connect with customers like never before,
keeping them actively engaged with their favorite lottery brands.
The strategies that have worked well for 60-plus years are beginning
to look less effective as the competition finds new ways to connect
with a national audience that’s ready to test their luck. But jumping
into a new era of marketing doesn’t mean abandoning the relationships formed in the past. Instead, LotteryHUB is offering lotteries and
retailers a way to strengthen their relationships, sell more, and capture
new sources of revenue. “With LotteryHUB, we can talk to players
right now,” Duea says. “The app is free to the players and we can generate revenue on the platform. Let’s drive retail engagement; let’s sell
more tickets.”
It’s time to connect with players in
a whole new way;
time to take hold
of new opportunities. Mobile means
growth. u
1 Jeff Sinacori. “Optimize Your Profits: Build an Environment Not Just a Store.” PGRI Talks: Scientific Games, Lottery Expo 2013.
2 “Digital Ad Spending Worldwide to Hit $137.53 Billion in 2014.” April 3, 2014, emarketer.com.
3 “Executive Summary: Advertising Expenditure Forecasts December 2013.” ZenithOptimedia
24
Educating and Engaging Retailers
Just Got Easier
With InTouch™ we use gamification in a few ways. First, we use it
to drive retailers back to the site by allowing them to earn points
and badges. For example, they might earn 30 points for watching the
newest lottery commercial and they might earn the “Age Verification Ninja” badge for watching a 5 minute video on how to verify a
player’s driver license. Points and badges can be used to earn prizes
like lottery hats and beach towels, or can be used to enter users into
drawings. Wouldn’t it be great for a store associate to learn about the
lottery’s latest games and promotions and to earn a chance to win a
gift card at the same time?
InTouch™ also uses gamification in the form of leader boards. Retailers are very competitive; they care less about their lottery sales
than they care about the lottery sales of the stores nearby. Let’s use
that healthy competition to our advantage! InTouch’s™ leader boards
are based on sales increases rather than sales, which means that even
low volume retailers can participate. If they can increase their sales
by a higher percentage than other retailers in their territory, they earn
a spot at the top of the board.
It’s not easy being a lottery retailer. If you could see inside the
mind of the average store owner
and manager you would likely see
that it is filled with candy, tobacco,
deli meat, bread, Coke, Pepsi, Budweiser and more. You’d also see
staff schedules, bank statements,
a reminder to call the refrigeration repair company, and a pile of
invoices. And somewhere in there,
you would see lottery.
By Adam Perlow,
Lottery is one of the most complex product lines that stores carry.
Chief Executive
Can you name another category
Officer, Hudson
other than scratch tickets where
Alley Software
new products are introduced every
few weeks and those new products
instantly become the best sellers? Can you think of other products retailers carry that require as much explanation as draw games?
Lottery sales reps play a critical role – they are the face of the
lottery to the retailer. They work hard to help retailers properly merchandise tickets, keep their point of sale signage updated, manage
their ticket inventory, educate them on new games, conduct promotions, and explain retailer incentives. They also get to play bookkeeper and help retailers understand their lottery finances. They perform
hundreds of other tasks that are too numerous to list. They do all this
in just two short store visits per month, on average.
What about the other 28 or 29 days of the month? In a world made
up of smart phones, tablets, and pervasive data plans, we are still
mainly communicating with retailers the same way we did 20 and
30 years ago!
At the most recent PGRI conference in New York, Hudson Alley
launched a new Retailer Engagement Platform™ called InTouch™.
The goals of InTouch™ are simple; to increase sales by educating retailers and by providing merchandising guidance for scratch games
—and to do so in a way that will keep retailers coming back to the
platform. The content is delivered through retailer-centered smart
phone apps and a retailer-centered website.
A dynamic product line requires Dynamic Planograms™
According to Oxford Dictionaries, a planogram is “a diagram or
model that indicates the placement of retail products on shelves in
order to maximize sales.” They are used by most retailers and are used
religiously by chains to ensure that the right products are on the right
shelves. They provide retail employees with directed work; store associates don’t need to make decisions about which products to put on
the shelves, they just simply need to follow the plan.
Many lotteries provide planograms of scratch games to retailers
with each new game launch, but with thousands of retail locations
and dozens of games available for sale, it’s impossible to produce
standard planograms for every scenario. While there are industrystandard display sizes, there are also many unique displays like
bridges, towers, and other displays made up of modular bins. Also,
different price-point combinations may work better at some retailers
than others. For example, one retailer with 32 bins might carry five
$20 tickets, while another retailer in a different part of the county
might have better sales with only two $20 facings.
InTouch™ uses proprietary algorithms to produce a custom planogram that is optimized for that specific retailer at that specific moment.
The algorithms take many things into account, such as the number of
facings the retailer has in each sales area of the store, the number of
facings for each price-point (as specified by the lottery sales rep), core
games, new games, best-selling games in that store and in that territory,
the packs of tickets that the retailer currently has in the safe, and more.
Store employees can pull these Dynamic Planograms™ up on their
phones, tablets, or computers and the planograms can also be printed.
These planograms provide the store associates with directed work—
the decisions have been made for them, they simply have to follow
the plan. And of course, they can earn points and badges by following
the planograms!
To learn more about InTouch™ visit www.hudsonalley.com. u
Education through Gamification
Just like lottery sales reps are the face of the lottery to retailers, the
retailer is the face of the lottery to players. It’s important for retailers
to understand your games; if they don’t understand them, how likely
is it that players will? InTouch™ helps keep store associates educated
and trained by using gamification.
Gamification is the technique of using game mechanics in nongame situations and is often used to drive website user engagement.
25
July/August 2014 • Public Gaming International
28
XX
Points for Prizes includes a web store where players can
redeem points for merchandise and music downloads.
29
XX
Jim Acton
30
XX
FOR
POSITION
ONLY
31
XX
Public Gaming International • June/July 2014
Casey McKenzie
A TIME
FOR ACTION tively small size of tickets and their sales velocity. So I believe
in the category and its ability to drive traffic and enhance total
store sales especially in key categories such as cigarettes, other
tobacco products and beer.
But my message to the industry as you prepare to convene at
this year’s PGRI Lottery Expo is this: Commit now to leave Miami
with at least three action items that you plan to accomplish within
six months to better support and partner with your retailers.
And believe me, I do understand and have come to appreciate,
the unique challenges inherent in the lottery commission world.
But even with that, even given the fact that “the lottery” is a
monopoly in each jurisdiction, and given all the challenges presented by the unique mission and governance of your business,
I urge you to work with your retailer partners in that way—as
business partners.
Learn their pain points (discussed in last year’s article) and discuss ways you can help alleviate them. Provide them the support
and training they need to be better partners for you. Take a broader
perspective and strive to understand their total business model and
how your product can positively enhance total store performance.
As I told the attendees last year, learn to speak “retailerese.”
Don’t take the approach so many of us do when in a foreign
country and just TALK LOUDER in a miss-guided attempt to be
understood. Retailers will thank you for it and you’ll benefit from
the open lines of communication.
I wish you a great conference this year and truly hope you
leave there with action items designed to improve the business
model for all concerned. To close, I’ll paraphrase Mr. Keith:
A little less talk, if you please. A lot more “partnering” is what
I need.
Let’s get on down to the main attraction with a little less talk
and a lot more action. u
Last September in this magazine I wrote an article titled “A
Time of Great Opportunity.” I led the article with this: “As 2013
draws to a close the lottery industry faces what I believe is a
time of great opportunity in the convenience retail channel in
North America. With tweaks to both Powerball and Mega Millions already in place and the advent of online lottery and other
online games planned in some states, the lottery industry has the
convenience channel’s attention.”
Having attended and presented at the PGRI Lottery Expo in
Miami and since then talking to many lottery retailers and vendors, I do believe progress is being made. But in the words of
Toby Keith’s hit song, it’s time for a “little less talk and a lot
more action.”
For those unfamiliar with me, I am a former convenience chain
retailer and have served as a category management consultant
and trainer for the past 17 years so I think I can safely speak on
behalf of my retail colleagues when I say we are people of action.
Retail is a minute-by-minute race 24/7 and in the case of most
c-stores 365 days/year.
Few things are more annoying to action-oriented people than
multiple meetings/conferences where the same issues are discussed but never resolved or that don’t even produce action items
to be accomplished. Moving from my perspective as a member of
the Florida retailer advisory board in its early years to now an observer and advisor in this category I sometimes feel I’m in a timewarp, i.e. the more things change, the more they stay the same.
And please hear me: I no longer bemoan the commission percent associated with lottery sales. I have seen enough research
and conducted my own analysis to prove to me the total value of
loyal lottery players to our business. It’s often described as “fast
nickels” versus “slow dimes” from other categories. And from a
true activity based costing perspective it may well be “true profit” versus “true loss” compared to other products due to the rela-
Casey McKenzie, Senior Principal Consultant with Impact 21 Group, LLC, with over 20 years’ experience working at a leading c-store chain and another seventeen spent in consulting, has experienced almost
all facets of the c-store channel of trade, including finance, operations, category management, re-engineering and strategic planning.
Impact 21 Group is a leading global consulting company in the petroleum/convenience, retail and refining industries. With over 200 years of combined retail and refining experience, our experienced team
of consultants brings aggressive real world leadership to business and technology initiatives.
32
Lottery’s Evolution into Omni-Channel Retailing
It is a common misconception that the introduction of interactive
and mobile channels to the lottery industry will have devastating
effects on traditional retail gaming. In fact, the opposite is true—interactive and mobile gaming, if done well as part of an integrated
strategy, can increase sales at retail. Interactive options give lotteries
the opportunity to leverage sales across several channels and attract
new players.
The key to leveraging this cross-over success is through omnichannel retailing—a flexible, customer-driven approach that provides a seamless experience specifically tailored to each sales channel, including traditional bricks and mortar, web, mobile, television,
and social media. Omni-channel consumers have consistently proven to be amongst the most valuable of all consumers segments by
many of those that have already implemented this retail model—
spending more than those who simply engage through retail.
tail partners are part of the evolution. It is vital to demonstrate that
these new products actually help support and grow retail. We have
seen in a number of jurisdictions around the world that retail sales
keep growing—typically at a faster rate—even as lotteries introduce
digital offerings, both ‘Space Between’ products and internet sales.
The Michigan Lottery has recently announced that it is expanding
its interactive presence with the launch of online gaming, provided
by Pollard Banknote and NeoGames. As it prepares to launch its online gaming platform, the Lottery is leveraging the knowledge it has
gained through a number of successful ‘Space Between’ products to
develop targeted and highly-personalized marketing campaigns that
successfully cross-promote other products and channels. The Lottery has already established and retained a strong and loyal player
base by offering a diverse range of products through a wide selection of channels. From a number of successful mobile apps to the
Lottery’s robust, high-traffic website that includes an active Players
Club to several interactive games, each channel engages players and
enriches the overall experience while serving to gather information
about player preferences.
Recently, Pollard Banknote partnered with NeoGames, a leading
global internet lottery provider with strong expertise in online and
mobile products, to launch NeoPollard Interactive. NeoPollard Interactive will provide lotteries with customized interactive solutions
that span the range of the category—from interactive games, second
chance drawings and apps, to a fully operational online gaming platform and suite of games.
Expanding Options—from Retail to the ‘Space
Between’ and Beyond
Due to a growing range of technological advancements, consumer
expectations have evolved, and people expect to be able to interact and access information whenever, wherever, and however they
choose. Research shows that approximately 75% of consumers are
willing to embrace digital channels during the shopping process1,
and multi-device users are increasingly common. As lotteries continue to develop a more in-depth understanding of this behavior, that
knowledge can be leveraged to implement personalized marketing
strategies that educate, engage, and optimize the player experience.
Pollard Banknote, one of the world’s leading full-service lottery
vendors, helps clients redefine the instant ticket marketplace through
the development of the ‘Space Between’ channel. The ‘Space Between’ refers to the space in the market that exists between bricks
and mortar retail activity and the purchase of lottery products over
the internet. The ‘Space Between’ is an important and growing
channel within the omni-channel ecosystem that can and should be
fully leveraged to optimize sales. Pollard Banknote has introduced
a number of interactive and technology-enabled products that have
been very successful to date, particularly when adding an interactive
component to a known instant ticket brand. For example, Pollard
Banknote’s popular WebPlay™ Crossword and Bingo games deliver
an opportunity to extend the life of a traditional instant ticket by providing related play on a lottery’s website or through a mobile app.
Creating and operating interactive mobile and web channels will
help lotteries to grow their player base, optimize player engagement
and retention, and build their brand by cross-promoting across all
channels. Engaging players through interactive and technology-enabled products gives lotteries the opportunity to introduce players to
their brand, particularly a younger and more tech-savvy demographic. This approach significantly increases the likelihood of those players then purchasing games in-store, especially as traditional lottery
product offerings are expanding to include more interactive features
that blur the lines between these channels.
One key to successful interactive initiatives is ensuring that re-
Omni-Channel Retailing in Action
The advantages offered by omni-channel retailing reach beyond the lottery industry with proven strategies being launched
by some of the most widely-recognized and successful retailers in
the world. Walgreens, the largest drug-retailing chain in the United
States, has embraced the concept by recognizing the importance
of this approach and has effectively adopted cross-channel tactics
that ensure the complex pathway to purchase is made simple and
convenient. Research done by Walgreens shows that omni-channel
consumers—those that purchase products in-store, online, and
through mobile smart phones—spend up to six times more than
those that buy exclusively at bricks and mortar, supporting the theory that omni-channel customers are amongst the most valuable of
all consumer segments.
…continued on page 38
www.PollardBanknote.com
1) Toshiba Global Commerce Solutions white paper, “Omni-Channel Vision, Cross-channel Reality: Meeting the Consumer Where They Want to Buy”
33
CHAIN REACTION
INTEGRATED IN-LANE SOLUTIONS OPEN NEW
DISTRIBUTION CHANNELS AND ATTRACT NEW PLAYERS
Competition in today’s retail environment is fierce, as busy consumers are increasingly
turning to large chains, discounters, and big box stores for convenient, one-stop
shopping. One way to keep lottery viable and growing within the evolving retail
channel is to equip new trade styles with integrated Point of Sale (POS) solutions that
use the retailers’ own POS systems and networks to sell lottery tickets.
platform has helped more than 9,300 stores, 22 retail chains,
and lotteries in 9 jurisdictions from the U.K. to Mexico, Finland
to New Zealand to:
With a properly executed POS solution integrated into the
retail terminal, lotteries reach more players and sell more
tickets. Selling a lottery ticket becomes the same as selling any
other item. Lottery products are added with the customer’s
non-lottery purchases and printed on register receipt paper,
without adding tasks for clerks or slowing down lines. By
simplifying the accounting process – ticket sales are captured
as a standard SKU bar-coded sale into the retailer’s system
and, by default, in all POS and back office reports – the right
in-lane system turns lottery into a more attractive product for
large-scale chains and other corporate retail environments. In
a recent online study in the U.S., results were overwhelmingly
in favor of in-lane purchases:
› Open new distribution channels and recruit new retailers.
Because they are easy to use and do not take up any space
on the counter, integrated POS solutions have proven
useful to recruit chains in non-traditional trade styles. Of
the 22 chains in which Lottery Inside has been implemented
worldwide, 14 (representing more than 5,880 stores and
14,490 checkouts) had not previously sold lottery, including
Netto in Denmark, Real in Poland, and Carrefour in Belgium.
14 RETAIL CHAINS THAT NEVER OFFERED LOTTERY
› 89% of lottery players found the idea of buying Quick Pick
tickets in-lane appealing.
BEFORE ARE NOW SELLING DRAW GAME TICKETS
› 61% would buy lottery tickets more often if this option were
available.
THROUGH THEIR POS REGISTERS AND GTECH’S
Lottery Inside has been GTECH’s integrated in-lane solution
for lotteries around the world since 2005. The Lottery Inside
INTEGRATED POS SOLUTION.
34
› Increase same-store sales from existing retailers. In many
chains, dedicated terminals help service regular and loyal
players, while in-lane systems attract new, light, and lapsed
players. This is especially true in periods of high jackpots:
An example from Denmark shows that in-lane sales growth
peaked at 100% higher than the normal level of sales,
while growth from terminal sales peaked at 50% higher. Inlane solutions also significantly increase a lottery’s sales
capacity during “jackpot mania” periods. Lottery Inside
sales on average accounts for 5–30% of total lottery sales.
Comparisons of sales trends between Lottery Inside and
non-Lottery Inside stores suggest that all Lottery Inside
sales are incremental.
› Defend and grow brick and mortar sales: Momentum
is building in the U.S. marketplace for integrated POS
solutions in several jurisdictions and retail chains. Many
lotteries consider the increased convenience of in-lane
solutions a must to help defend and grow brick and mortar
sales in the future.
IN DENMARK, RESEARCH SHOWED THAT 25% OF NONPLAYERS WOULD MAYBE/LIKELY/DEFINITELY PLAY IN-
› Expand player base and lottery awareness. With more
and different retailers, lotteries can expand their reach to
consumers across a larger demographic, making lottery
products more accessible and improving the perception of
lottery as an integral part of the fabric of the community.
LANE. IN THE U.S., 61% OF LOTTERY PLAYERS SURVEYED
SAID THEY WOULD BUY LOTTERY TICKETS MORE OFTEN
IF IN-LANE PURCHASING WAS AN OPTION.
THE RIGHT MIX: ESSENTIAL SALES AND
MARKETING CONSIDERATIONS
Sales and marketing strategies are crucial components of
in-lane implementations. Years of operating experience
and feedback from huge retail chains, including Carrefour
and TESCO (U.K.), the second- and third-largest retailers
in the world, have provided GTECH and the lotteries it
services with insights into:
› The optimum number and mix of game offerings and
price points: Current in-lane deployments offer from
three to six games in a variety of price points, depending
upon such factors as demographics and the space
retailer allots for lottery.
Belgium’s Loterie Nationale offers a variety of games, price points, and dispensers
› Quick Pick card size and design: Often lotteries will go
through several iterations to find the most effective
performer for their market.
› Dispenser design and placement: In some cases, a
variety of dispensers should be designed to fit individual
in-lane environments to ensure optimal impact and
shopper appeal.
Innovative card dispensers attract attention and sales in New Zealand
› Advertising and customer awareness: Some lotteries
incorporate jackpot awareness into their in-store
digital signage; in one case (Carrefour in Belgium), the
lottery has introduced dedicated jackpot signs at every
checkout with great success. Asking for the sale is
another important sales driver.
Real (Poland) and Carrefour (Belgium) use in-lane signage to grab consumers’ attention
35
“AT ONE STORE, IN-LANE SALES REACHED 30% OF
ticket accounting system, a breakout design that resolves many
of the issues surrounding the management and sale of instant
lottery games. In the past, selling instant tickets in a multilane
environment was problematic, due to the special handling
and “out-of-system” accounting they required. Accuinstants
solves those concerns: Each instant ticket is activated, sold,
and accounted for individually at the time of sale, just like a
chain’s other products and draw game tickets.
TOTAL SALES SIMPLY BY IN-LANE CLERKS REGULARLY
REMINDING CUSTOMERS OF THE LOTTERY OFFERING.”
Michael Terp, Key Account Manager,
Danske Spil, Denmark
In-lane sales of Kiwi Instants currently account for
approximately 6–7% of over-the-counter instant ticket sales,
which is expected to grow
to 10% in the coming
months. Awareness is
the biggest challenge for
instant ticket sales: since,
unlike for draw games,
there are no game cards,
shoppers may not be
fully aware that instant
games are now available.
Sample self-service checkout screen at Countdown,
(Instant tickets are stored
New Zealand
in a dispenser located
between two clerks, and tickets are scanned on sale for
activation.) Plans are underway to introduce higher price point
tickets to further drive instant in-lane growth.
TAKING IN-LANE TO A NEW LEVEL:
INSTANTS AND SELF-SERVICE IN NEW
ZEALAND
Late in 2013, Lotto
New Zealand initiated
an in-lane program
with the Countdown
supermarket
chain.
Two things set the New
Zealand program apart.
First, Countdown’s inlane solution includes
not only draw games
through Quick Pick –”Dip” in New Zealand – cards at various
price points but also Instant Kiwi tickets at two price points
(NZ$3 and NZ$5). Second, the chain sells tickets from selfservice lanes as well as clerk-staffed lanes.
Self-checkout supports sale of only draw games; Instant
Kiwi products are not offered for responsible gaming
considerations. Despite this, Self-Service lanes account for
20% of Countdown’s in-lane sales. Local surveys show that
players like buying lottery products at Self-Service lanes,
mainly because of the privacy offered with self-checkout.
Tickets are sold through three different in-lane configurations.
Full lane units offer all tickets at all price points; Express lane
units offer draw game Dips and NZ$5 Instant Kiwi tickets; SelfService lanes sell draw game Dips only.
The Lotto New Zealand implementation has been as great
success. The New Zealand Lotteries Commission reports
that the Countdown implementation “met all success
criteria including sales and positive customer experience.”
Countdown reports an 8% increase in lottery sales in stores
with the new system, compared to those with separate lottery
counters only, with no material issues identified and no
customer complaints received, and says, “Feedback was very
positive from customers in relation to not having to queue
twice.”
MAXIMUM SALES, MINIMUM RISK
High visibility contributes to the success of Lotto
New Zealand’s in-lane program
With the right in-lane solution, based on lessons learned
and today’s advanced technology, Lotteries can have a fast,
convenient presence where players shop – in a cost-efficient
manner without high-risk modifications.
Countdown’s in-lane sale of instant tickets
is enabled by GTECH’s Accuinstants™ ticket- by-
36
Converting Players: How Land-Based Retail can Thrive in a Mobile World
By Cameron Waldie, President of Carmanah Signs,
and Chris Riegel, CEO of STRATACACHE, the parent company of Carmanah Signs
Let’s face it, consumers don’t venture out into the retail environment like they used to. They are changing how they shop, creating new patterns that impact Retailers, Brands and Lotteries. Millennials are contributing to this battle raging within retail: the battle between brick-andmortar and .com to win the consumer.
Brands such as Lotteries can’t reach the mass market with media such as television as efficiently as they once could. Instead, engaging consumers within the retail environment, at the point-of-influence, is becoming essential. Advanced technology is playing into the customer’s
decision-making process, and those most influenced by technology are Millennials.
In 2015, Millennials will spend $2.45 trillion. By 2018, Millennials will eclipse baby boomers in their spending power. The time to prepare
for this new generation of smart phone users being the dominant buyer has arrived.
The fuse is lit. What can Lotteries do to really engage consumers in-store? Here is a three-step plan to leverage technology and be a successful
Brand in the new retail world.
First, stand out and be cool. A Brand should become more impactful to the Millennial who is saying, “I am the one spending money and
you need to impress me”. Accordingly, retailers are adding digital technology to create brand experiences that generate repeat visits. For
example, Stratacache/Carmanah’s digital full video menu boards for Convenience Stores and
Quick Serve Retail provide compelling images and information that attract customers and help
keep them coming back.
The images, videos and pricing can be scheduled remotely, with the capability of micro-targeting specific imagery to individual stores and the flexibility to push content based on time of
day. Lotteries can optimize their existing digital sign networks and/or install new digital sign
networks in their retail channels.
Second, mobile apps and mobile web connections with the consumer are essential. Everyone is vying for landscape on the consumer’s
mobile screen. If a Lottery doesn’t have a voice on a consumer’s mobile device, then which indirect or direct competitor will? Lotteries can
both add value to their mobile app experience and engage players at retail by implementing
iBeacon or BLE (Bluetooth Low Energy) technology. An iBeacon installed at retail allows
a Lottery to know when a player is at a specific Lottery retail location, enabling a tailored
message to be sent to their mobile device.
Products such as Carmanah’s iBeacon EnaBLE™ Jackpot signs allow Lottery marketers to
collect visit data and, more importantly, send custom messages to mobile players, enhancing the player’s retail experience and increasing the perceived value of the Lottery’s app to
consumers who have not yet downloaded it.
Third, consider installing interactive technologies in the retail environment. Consumers want to enjoy shopping in stores and will become
loyal if they do.
Interactive technologies such as touch or gestural screens create more opportunities to interact
with consumers. Since data can be analyzed from every consumer interaction, the user experience can be continuously improved, allowing for a higher customer satisfaction over time.
Examples from the Stratacache/Carmanah product line of interactive technologies are touch
screens embedded in play stations and touch screen entertainment modules.
Thoughtful use of retail technology is the key. Consumers lead busy lives and are demanding
more from their shopping experience. Changes in technology and shopping patterns mean that all Brands, including Lotteries, should increase
their investment in the retail environment. The Brands that do the best job at of using retail technology to attract and engage consumers will
be the most likely to grow their sales in the years to come. u
STRATACACHE is a global provider of digital shopper marketing, retail conversion & mobile activation strategies. With 1.3 million active devices
in retail environments, STRATACACHE helps influence and convert consumers every day. Carmanah Signs is STRATACACHE’s Gaming Division.
37
interface to make it more intuitive and easy to use.
The result is a simplified game that serves
the core needs of lottery players—a genuine
case of ‘less is more.’
After creating this new,
lean version of our original
GeoSweep, we began work
on the game’s branding. Our
aim was to create a brand which is
instantly recognizable, trustworthy and modern. The previous color
scheme of dark purple has made way for a predominantly white look
and feel that’s accented with big, bold, bright colors. The new logo
and site-wide branding of pink, blue and green conveys a simple
message —‘this is, above all, a lottery game.’ Importantly, we felt
that the evolution of GeoSweep warranted a new name too, and with
that, GeoLotto was born.
Mapping the Road from
GeoSweep to GeoLotto
By Henry Oakes, Co-Founder, Geonomics
Geonomics has come a long way since it started with a bright idea
in a spare bedroom back in 2008. Now a well-funded company with
a global reputation and a team of 40, evolving the business has been
a roller coaster ride of twists, turns and learning curves, taking us up
to the point of launching GeoLotto in September—a re-engineered
product that builds upon the foundations laid by GeoSweep.
Our experience with the Atlantic Lottery Corporation in Canada
(ALC) prompted us to ask ourselves many fundamental questions
about both our product and the business as a whole. One particular
question had the most profound effect on the way we now see our
world—‘who is the customer?’ The answer is that our customers
are the players, not the lotteries. We were so fixated on delivering a
product for ALC that we neglected the people who matter most —
the players. This subtle but important change in mind-set has given
us a player-centric approach to product development and an unwavering desire to build lottery products that players love.
The last 12 months have been about going back to basics and
stripping our whole product down to its bare bones in an iterative
process of market research, in-depth user testing and quantitative
analysis of real-life player data. Among other things, our work revealed that some features, such as social groups, different Geo sizes,
fancy jargon (what is a “Geo?”), and daily draws didn’t resonate
with players. They were considered unnecessary and overly complicated. Responding to this feedback, we set about making a product
that has been shaped by the wants and needs of players. In addition
to cutting-back on features, we also radically improved the user-
After a year of refining and developing, we are now delighted
to be working towards our launch in September 2014. Highly optimized digital media will be supported by a nationwide TV campaign
that will give GeoLotto the platform it deserves. The first of our
weekly £1,000,000 jackpot draws will take place on Saturday 27th
September and words can’t describe our excitement.
Of course, September is not the end but the beginning of a
journey of continuous product development that will see us react
to the learning of being ‘live’ and respond to the ever-evolving
wants of our players. Our goal has always been to serve the lottery industry and to help it to thrive now and in the future. And
now, more than ever, we believe we have a game which will succeed in doing just this. u
Geonomics will be at NASPL and WLA showing-off GeoLotto
in the way only we know how. As always, we’d be delighted to see
you all there, and look forward to telling you about our progress
post-launch.
Lottery’s Evolution into Omni-Channel Retailing … continued from page 33
Like Walgreens, some in the lottery industry
have also discovered that players who engage
through multiple channels spend more than those
who are simply retail players. One lottery found
that those who purchased products both in-store
and online spent as much as two times more than
those who bought exclusively at retail. Several
other lotteries in Europe have also experienced
growth in their retail business as they launched or
expanded internet lottery sales. A strategic omnichannel approach can yield win-win outcomes
for traditional retail and online channels.
38
Simplicity and convenience are key in the
ever-evolving landscape of technology-driven
consumers. Offering consumers a consistent
experience that is easily accessible across all
available sales channels heightens brand awareness, encourages customer loyalty, and provides
improved flexibility in choosing how to interact with a brand. Creating more opportunity for
consumers to engage with lotteries through an
omni-channel ecosystem ultimately results in
increased revenue—and for lotteries that means
more money for the good causes they support. u
The new Customer Journey
Fivi Rondiri, Corporate Marketing Coordinator, INTRALOT
How do you know
what your customers
really want? The best
way to figure that out is
to step into their shoes
and see what their journey with your brand
looks like. Their customer journey, that is.
The customer journey
is not only the sale but
rather a complete mapping of how a customer
becomes aware of your
brand, how they interact
with it and what happens afterward.
For years, we marketers really focused around three main steps
in the purchase cycle, the “three moments of truth” as coined by
Procter & Gamble.
They see ads in TV, read reviews online and walk into stores to look
at products. They also switch devices to suit their needs. They use
smart phones, tablets, desktop computers and laptops.
ZMOT is fundamentally about getting closer to your customer
and here are some ideas of how you can do that:
Be active on your website
Updating your website with fresh content is one of the best ways
to give your site’s visitors a reason to come back. In the online world,
you should consider your site as a continual work in progress. Keep
updating and improving. Let your site project your enthusiasm for
the good causes you support, your games and of course your people.
1.First Moment of Truth
This represents the first moment the consumer sees your product in the store. Those few seconds are the most crucial: seeing the
window jackpot sign and dreaming what your life could look like if
you could pay off your debts, buy yourself a nice house or travel the
world. That’s what lotteries offer: aspiration of winning!
“Change is the law of life. And those who
look only to the past or present are certain to
miss the future.” —John F. Kennedy
2.Second Moment of Truth
This represents the moment when the consumer buys the product.
It’s really about the experience: talking to the clerk, getting information directly from self-service devices, choosing your favorite lucky
numbers and holding in your hands that valuable lottery ticket. Then
of course part of the experience is also checking the winning numbers, realizing that you won.
Offer a seamless experience through all channels
Today’s consumers are constantly connected, moving from smart
phone, to computer, to tablet. They may be changing devices but
their intentions don’t change. And regardless of which device they
use, they expect you to deliver a consistent, seamless brand experience. Make sure that your customer can access your site no matter
what device they use.
3.Becoming a loyal Fan
This represents the post-product use period. It’s when your customer becomes a true fan, registers to your Player’s Club, likes your
Facebook page and gives back to your brand with new content: word
of mouth and testimonials.
This model has helped many marketers breakdown their customers’
journey, better understanding what their motivations are and what they
need to do to engage with them at each moment. But is it complete?
Marketing today is challenged by the increase of new connected
mobile devices and the easy availability of valuable information.
Whether we’re shopping for cookies or a trip to New York, the Internet has changed how we decide what to buy. Google named this online decision-making moment the Zero Moment of Truth (ZMOT).
The ZMOT represents the moment when people research products before buying. In short, nowadays the customer’s journey
looks less and less like a traditional sales funnel. Today’s customers
bounce back and forth at their pace in a multi-channel marketplace.
Build trust with answers
Great customer service starts with being available and open. Showcase the good causes you support by adding videos as well as pictures. Moreover, don’t forget to answer the more obvious (to us) questions like what a playslip is, how to play or when the next drawing is.
Reward your loyal customers
Loyalty is more important in the retail world than ever. Loyalty
programs improve customer service by showing customers that they
are valuable and appreciated. Most importantly, successful loyalty
programs retain customers for a longer period of time, which sig…continued on page 51
39
MOBILIZE YOUR LOTTERY BRAND
Modernization is critical to maintain relevance. In today’s world, this means lotteries
must have not only a strong retail, web, and social media presence, but a robust and
compelling mobile strategy as well.
The proliferation of tablets and smartphones has dramatically
altered the online landscape, to the point that the Internet is
now primarily a mobile medium. A recent study on mobile use
and gaming commissioned in part by GTECH and conducted
by Leger, The Research Intelligence Group, confirms what is
rapidly becoming apparent even to the naked eye. The vast
majority (76%) of the U.S. adult population currently owns at
least one mobile device – a 15% jump since 2013. Moreover,
and perhaps surprisingly, lottery players are more likely to own
a smartphone and/or tablet than are non-players.
› The mobile category was once thought of being the
province of the very young, but in fact:
The 30–39 age group has the highest ownership of
either a smartphone or a tablet and is more likely than
any other group to own both devices.
»
Nearly half of people 65 and over own a smartphone, a
tablet, or both.
»
Mobile device ownership is pervasive across gender
and race.
30–39
40–49
50-64
65+
Own
smartphone
and/or tablet
76%
89%
91%
84%
67%
48%
Play games on
smartphone/
tablet
79%
85%
92%
87%
67%
48%
»
19% more lottery monthly lottery players own a smartphone/tablet than do non-lottery players (82% vs. 63%).
»
More than 86% of people who have bought or intend to
buy lottery online have one or more mobile devices.
»
Almost 4 out of 5 people who have purchased lottery
online own both a smartphone and a tablet.
»
Half of all those who “intend to purchase lottery online”
own both devices.
› Lottery players are more likely to play games on their mobile
devices than non-lottery players.
› Nearly 4 out of 5 smartphone/tablet owners play games
on their mobile device; again the 30–39 age group leads
that category (at 92%), with 40–49 and 18–29 not far behind.
18–29
› Mobile device ownership is even more prevalent among
lottery players than among non-players.
In fact, the Leger study debunks many myths widely believed
about the mobile category, especially as it pertains to lottery
players. For instance:
»
U.S
Adults
40
»
Past-week lottery players heavily over-index on playing
mobile games multiple times a day (60%).
»
Over 60% of past-month lottery players play a mobile
game at least once a day.
Among U.S. Adults
Among Mobile Device Owners
100
75
100
87
82
75
72
71
63
50
60
50
33
25
35
31
60
34
25
39
31
12
0
Own a Smartphone and/or Tablet
Past-Week Lottery Players
Might Consider Purchasing Lottery Online
Play Games on Mobile Device
Past-Month Lottery Players
What does all this mean for lotteries? If you do not have a
robust mobile strategy, you risk missing out on opportunities
both to retain the customers you now have and to grow and
diversify your player base. Quite simply, mobile makes lottery
more convenient, especially for new and lapsed players. Even
if your lottery has no plans to sell games online, you can
immediately engage mobile consumers with a convenience
app, second chance promotions, play for fun games, and/or
traditional lottery games with mobile components.
Play Games Multiple Times per Day on Mobile Device
Lapsed Players
Non-Players
62% OF SMARTPHONE USERS – AND 83% OF PAST-MONTH
LOTTERY PLAYERS – FIND THE IDEA OF A LOTTERY APP
“VERY APPEALING” OR “SOMEWHAT APPEALING”
where to find their nearest Lottery retailer – right at their
fingertips. Valuable mobile app features include:
› Jackpot amounts and alerts
MAKE THE MOST OF MOBILE WITH A
LOTTERY CONVENIENCE APP
› Winning numbers
› Lottery retailer locator
New data (as of March 2014) from app analytics provider Flurry
found that users spend a whopping 2 hours and 42 minutes per
day on mobile devices, and that
all but 23 minutes of that time is
spent on mobile app (as opposed
to web) usage. This suggests that
consumers are opting for the
ease of use, security, and focus
that apps provide over larger,
diffused websites. Developing
a mobile app and promoting it
among your players can be vital
to furthering your business.
› Digital playslip
› Games to Go
› Mobile ticket checker
› How to play guides
› Responsible Gaming information
ADD INTERACTIVITY TO
SECOND CHANCE DRAWINGS
Mobile devices and apps provide an excellent channel
for second chance drawings. For the New York Lottery’s
Bejeweled promotion, players simply use the Lottery’s mobile
app to scan the QR code on the back of their Bejeweled
ticket (a QR reader is embedded in the app) to be taken to a
responsive second chance site. The New York promotion also
A convenience app gives your
customers an abundance of
lottery information – including
41
their attitudes about online lottery games (play for fun and for
sale), including which mobile game genres appeal to lottery
players and some of the brand affinity and brands that might
resonate with these players. Of particular note is the finding
that as many as 40% of U.S. adults, nearly half of all pastmonth lottery players, and 60% of past-week players surveyed
say they are interested in playing an online scratch game via
mobile device.
includes a Bejeweled play for fun game that can be played on
any device and on any platform.
MOBILE GAMES & COMPONENTS
Mobile games on smartphones and tablets have clearly
reshaped customer expectation for the lottery. The Leger
study has provided GTECH with many insights into mobile
device users’ and lottery players’ gaming experience and
Of course, you can also have a powerful mobile
strategy without actually offering mobile
games. Evolving your draw games portfolio to
incorporate a mobile reveal, such as has been
incorporated in the new Bingo To Go game
(launching later in 2014), will draw consumers
to your lottery’s app and website and keep
them coming back. Results can be seen via an
animated drawing on the Lottery app; when
the player scans the QR code on his or her
ticket, numbers will automatically populate the
player’s bingo board as they are drawn!
Pundits used to speak of the mobile channel
as the future of the Internet, but clearly, that
future has arrived. Whatever your intentions
or legislative restrictions, having an effective
mobile strategy in place is one of the keys to
maintaining and growing your customer base
in today’s mobile age.
42
Pulse
of the
Industry
These news stories comprise a small fraction of the gaming and lottery news stories posted every day to
www.PublicGaming.com. Too, these stories are the short versions. You can visit our news website and
go to the “search” field at www.PublicGaming.com to pull up the complete story. Sign up for our free
e-newsletter by just sending your e-mail address to sjason@publicgaming.com.
Gavin Isaacs Named CEO at
Scientific Games Corporation
Scientific Games Corporation appointed
Gavin Isaacs as President and Chief
Executive Officer of Scientific Games,
succeeding David L. Kennedy effective
immediately. Mr. Kennedy will continue
to serve as Executive Vice Chairman of
the Board.
Mr. Isaacs is an accomplished gaming
industry executive with more than 15 years
of industry leadership experience. Most
recently, he served as Chief Executive
Officer of SHFL entertainment, Inc. from
April 2011 through November 2013
when the company was acquired by Bally
Technologies, Inc. Previously, Mr. Isaacs
served as Executive Vice President and
Chief Operating Officer of Bally Technologies from May 2006 through March
2011. Prior to joining Bally Technologies,
he held senior roles at Aristocrat Leisure
Limited, including Head of Global Marketing and Business Development, Managing
Director of Aristocrat’s London-based
European subsidiary and President of Aristocrat Technologies, Inc., Aristocrat’s Las
Vegas-based subsidiary focused on North
and South America. Mr. Isaacs is also a
Trustee and former President of the International Association of Gaming Advisors.
“Gavin is a very talented and seasoned
gaming industry executive with the necessary skills to lead our Company to the
next level of growth and performance,”
said Ronald O. Perelman, Chairman of
the Board of Scientific Games. “He has
an impressive track record of success and
is recognized for his dynamic leadership. We believe his focus on customer relationships, strategic thinking and expertise in
growing innovation-focused businesses
make him the ideal choice to lead our
efforts to achieve greater profitability and
increased cash flow.”
Mr. Perelman continued, “We extend our
thanks and appreciation to David for stepping up to lead the Company during the
last six months and work with the Board to
facilitate the CEO succession. We were fortunate to have a leader of David’s stature
and experience at such an important time,
and we are pleased that he will continue to
serve the Company and our stockholders
as Executive Vice Chairman.”
Mr. Isaacs commented, “I am tremendously enthused to join the Company at
this exciting and challenging time and lead
the business to the next level. Scientific
Games has a skilled worldwide organization that is focused on improving performance and growth. In collaboration
with the entire Scientific Games team, I
look forward to working together as we
concentrate on creating and distributing
innovative products and services to our
customers, completing the integration of
WMS and enhancing stockholder value.”
Kambi Sport Solutions Ratified as
Associate Member to the European
State Lotteries Association (EL)
The EL is the European umbrella organi43
zation of national lotteries operating games
of chance for the public benefit. EL has
80 members from 46 European countries
including all 28 EU Member States. The
association’s EU members contribute
more than 20 billion EUR p.a. to the state
budgets and the funding of sport, culture,
social projects, research and other causes
of general interest.
GTECH’s Margin Maker™ Platform
Selected by Betfred to Support
Australian Sports Betting Launch
“GTECH is very excited to extend our
partnership with Betfred into the Australian market. This is the first such foreign
venture we have worked on together,
and we hope it is the first of many,” said
GTECH International Senior Vice President and Chief Operating Officer EMEA
Declan Harkin.
Florida Lottery Announces a New
Partnership with Wawa, Inc.
The Florida Lottery announces a new
partnership with Wawa, Inc. to provide
Lottery players with even more convenient locations to purchase tickets for their
favorite Florida Lottery games. Beginning
today, Lottery officials plan to install eight
Lottery machines weekly in Wawa stores
in both the Orlando and Tampa markets.
An estimated 63 Wawa stores will become
Florida Lottery retailers during calendar
year 2014, joining the more than 13,000
retailer network that already carry Lottery
Pulse
of the
Industry
Continued …
products. “The Florida Lottery welcomes
Wawa as the newest partner in our retailer
network,” said Florida Lottery Secretary
Cynthia O’Connell. “With the broad array
of products available at Wawa stores, adding Florida Lottery ticket sales provides
customers with a convenient one-stop shopping experience while helping raise more
money for Florida students and schools.” It is being reported, but not officially
confirmed, that the owners of lottery
operator and systems supplier GTECH
have authorised management to make
an all-cash 4-billion euro offer for Las
Vegas slot machine maker International Game Technology (IGT).
The UK Gambling Commission
has Issued a New Report Regarding
the State of the Gambling Market in
the Country
According to the report, the gambling
industry generated a total gross gambling
yield of £6.7 billion between October
2012 and September 2013. This was a
growth of £252 million from the previous
period. The report showed a comparison
between remote and non-remote gambling,
and indicated that non-remote betting
retained its market dominance as the most
popular form of gambling in the UK.Non
remote betting generated £3.3 billion in
gross gambling yield and claimed a 48%
GGY total. The non-remote casino sector followed betting with £1.1 billion in
GGY—16% of the market. Remote betting
matched non-remote casino with a 16%
market share, also with a GGY of £1.1 billion. There was also a significant growth in
revenue from remote gambling companies
in Great Britain, according to the Commission. GGY from these operators climbed
by £127 million compared to the previous
period. Also, GGY from remote operators
doubled from the 2009-2010 period to
£632.2 million. According to the report,
there were two areas in the UK gambling
industry which saw a decline in GGY
compared to the previous period—nonremote bingo and non-remote arcades. The
Gambling Commission will implement
the new Gambling Act on October 1st,
2014. All operators who provide gambling
services in the UK and want to continue
doing so need to submit an application for
a continuation license by the middle of
September. http://www.gamblingkingz.
com/news/2014/07/01/commission-british-gambling-figures-increase.asp
The Maryland Lottery and Gaming
Control Agency Joins the Multi-State
Lottery Association
“The MUSL model provides the best
foundation for pursuing new opportunities
and innovation,” said Maryland Lottery
and Gaming Control Agency Director
Stephen Martino. “I am confident that
Maryland will benefit because of the infrastructure and support of the MUSL team
and member lotteries.”
“We are extremely pleased to have the
Maryland Lottery as a member of the association,” said MUSL Executive Director
Chuck Strutt. “The strength and experience of the Maryland Lottery staff will
benefit all member lotteries as we reshape
our business operations and the joint
games for the future.”
Iowa-based MUSL facilitates the
operation of multi-jurisdictional jackpot
games and provides benefits to its members for enhancing traditional lottery and
casino revenue. This affiliation comes just
months before the MLGCA introduces
the newest national premium game in its
profile; the MUSL-run Monopoly Millionaires’ Club is due to debut in October.
MUSL, which was formed in 1987, is a
member-owned-and-governed non-profit
association consisting of 34 lotteries. The
group’s staff of 12 provides services
that include game research and development, drawings production, IT & security
standards, multi-jurisdictional marketing
and advertising pieces. The group offers
a variety of games, including Powerball (which Maryland began selling in
2010) and regional games 2by2, Hot Lotto,
All or Nothing and Wild Card 2. MUSL—
in partnership with International Gaming
Technologies—also provides MegaHits,
a multi-state, wide-area progressive slot
machine game.
44
Austrian Ministry of Finance has
Granted the Concession to Novomatic, AG for Two Casinos Casino/Racino
NOVOMATIC AG, Europe’s largest
gaming integrated group, announces that it
was granted the concession for two casinos
that will create hundreds of new jobs in
Austria. Building on the group’s long-term
know-how and expertise as an operator of 30 international casinos—among
them Germany’s largest casino, Spielbank
Berlin—NOVOMATIC will build two
state-of-the-art flagship casino operations,
one at the Vienna Prater and second one
in Bruck an der Leitha, Lower Austria.
NOVOMATIC CEO Dr Franz Wohlfahrt:
“The allocation of these licences now allows us to prove our international casino
competencies in our home market, Austria.
Apart from that it enables us to guarantee
the sustained growth at the NOVOMATIC
headquarters in Gumpoldskirchen whilst
creating jobs for 500 new employees.”
The N.C. Education Lottery earned
more than half a billion dollars for
education programs in fiscal year
2014, a 4.6% increase over 2013 and
the most money ever in a single year.
New Jersey Lottery has Implemented Hudson Alley Software’s OnePlace,
its iPad and Web-Based Lottery Sales
Force Automation Solution
“The lottery sales team, managed by
Northstar New Jersey, provides fieldservice to over 6500 lottery retail locations. The OnePlace tool equips them with
insights and actionable reporting that
enables them to provide great service,”
said Carole Hedinger, Executive Director,
New Jersey Lottery. “We are delighted to
work with the New Jersey Lottery,” said
Adam Perlow, Hudson Alley’s CEO, “they
are among the top performing lotteries and
they have ambitious goals. We’re glad that
they selected our software to help them
achieve those goals.” OnePlace offers two
user experiences; a native iPad app that is
fast, incredibly usable, beautiful, and that
uses locally cached data for users in the
field, and a web app that has all of the features of the iPad app and more—optimized
for users in the office or those using tradi-
tional PCs. “Our goal with OnePlace is to
offer a state of the art and budget friendly
lottery sales solution on the best mobile
platform available,” said Perlow. “OnePlace is subscription-based and doesn’t
require a large up-front investment. We
believe that lottery sales force automation is
now within the reach of all jurisdictions.”
New Jersey Lottery Expands Television Coverage with New Broadcasting
Partners
The daily drawing will air on stations in New York and Philadelphia,
expanding the broadcasting coverage to
reach New Jersey residents across the state.
The live evening drawings will air every
night at approximately 7:58 pm ET. The
live midday daily drawings will continue
to be available exclusively on the Lottery
website and Facebook pages at approximately 12:57 pm ET.
IGT Partners with bwin.party Digital
Entertainment to Launch many of
IGT’s Top-Performing Interactive
Games on the bwin Platform
IGT is supplying its content to bwin.
party, which has recently launched online
poker and casino offerings in New Jersey
under the license of Borgata Hotel Casino
and Spa (a long-term IGT land-based
casino customer), for distribution in New
Jersey at nj.partypoker.com and internationally at partypoker.com, bwin.com, as
well as at other bwin.party brands in nationally regulated European markets. With
market-leading positions in its product
verticals, bwin.party gains access to IGT’s
complete game library via a one-time,
simple integration to the IGT rgs (remote
game server) solution.
Association of Gaming Equipment
Manufacturers (AGEM) Releases June
2014 Index
After reporting month-to-month declines
for three consecutive months, the AGEM
Index reported a gain in June of 2014 when
compared to May 2014. The composite
index ended the month 3.6% from the
prior period. Compared to a year ago, the
AGEM Index has increased by 16.8%. The
broader stock markets also reported positive performances in June 2014.
The Responsible Gaming Council
has Launched RG Check
The Responsible Gaming Council
has launched RG Check—Internet, an
international accreditation programme
that enables gambling websites to have
their gambling safeguards assessed against
independent and evidence-based standards.
The standards for RG Check—Internet
were created by RGC, which will deliver
the programme in Canada. Internationally, the accreditation programme will be
administered by PricewaterhouseCoopers
LLP (PwC Canada) and member firms of
the PwC. Final accreditation decisions will
remain with RGC.
Casino Estoril Names JCM Global
Preferred Bill Acceptor Supplier
“JCM’s award-winning iVIZION®
continues to impress operators around the
world, and we are very happy to welcome
Casino Estoril to the iVIZION family of
customers. iVIZION has set a new global
standard for acceptance and security, and
as the foundation of intelligent validation,
iVIZION is a product casinos can buy with
confidence,” said JCM EMEA General
Manager Payam Zadeh.
The Maryland Lottery and Gaming
Control Agency Announce May 2014
Revenue Numbers
In a year-to-year comparison, May 2014
casino revenue increased from May 2013
by $6,651,889, or 9.6%. The Maryland
Lottery and Gaming Control Agency (MLGCA) is responsible for all matters relating
to regulation of the state’s casinos. New York State Gaming Commission: Traditional Lottery and Video
Lottery Sales Increased in FY2014
The New York State Gaming Commission stated that the traditional lottery
sales and video lottery net yield for fiscal
year 2013-2014 was $9.23 billion, with a
profit of $3.17 billion. This is a 4.2 percent
increase over the last year. This is also
the 14th year in a row of revenue growth.
New York has the most profitable lottery
in North America. “We are proud of the
significant contribution the Lottery makes
to support New York’s schools and we are
very pleased to have set yet another sales
45
record for the past fiscal year,” said Robert
Williams, Acting Executive Director of the
New York State Gaming Commission. “We
look forward to continuing this record of
success in the future.” Total sales and net
win were up $292.2 million (3.3 percent).
Profits were up $127.2 million. Much of
this is due to the Mega Millions game’s
continued popularity. There was also
growth in Quick Draw sales. “All Lottery
profits go to funding K-12 education in
New York State. The Lottery’s fiscal year
2013-2014 profit of $3.17 billion represents approximately 15% of total state aid
to local school districts.”
An Post Reports Strong 2013 Revenue Growth and National Lottery
License Win
An Post Group turnover for 2013 was
€811.7m, an increase of €807.3m. The An
Post Group worked in partnership with the
Ontario Teachers’ Pension Plan, the owner
of the Camelot Group, which includes
Camelot UK Lotteries Ltd and Camelot
Global, who provide consulting and
management services to lotteries internationally. An Post and the Camelot Group
have excellent records of increasing sales
in Ireland and the UK. Adam Sherman,
Air Business group managing director,
comments: “An Post gives us the freedom
to operate independently while supporting us as part of their strategic growth
strategy. The 20 year commitment to the
Irish National Lottery is an encouraging
investment supported by the strong Group
performance.”
Caesars Helps Write Federal
Anti-Online Gambling Bill
A new poker-only Internet gaming bill is
being considered on Capitol Hill. This bills
supports a federal law that would allow
online poker to be legalized at the federal
level but would prohibit other forms of
Internet gaming. “Other exceptions under
this proposed bill would include horse
racing and lotteries. The document does
not address fantasy sports, but one would
speculate that it would not apply, given
the NFL’s ability to lobby hard for fantasy
sports and against real-money wagering
on its games online. It is interesting to note
that the horse racing and lottery exceptions
Pulse
of the
Industry
Continued …
would immediately impact Delaware, one of
the three states that offers such activities.”
Former Rep. Connie Mack (R-Fla.)
Lobbying for Sheldon Adelson to Ban
Online Gambling
Former Rep. Connie Mack (R-Fla.) is
lobbying for Las Vegas casino magnate
Sheldon Adelson in support of legislation
that would ban online gaming, a sector of
the industry that competes directly with
Adelson’s casino holdings. Also, a few
weeks ago, Adelson’s company hired the
lobbying firm, The Keelen Group, to work
on the issue. “The bill to ban online gambling from Rep. Jason Chaffetz (R-Utah)
and Sen. Lindsey Graham (R-S.C.) would
overturn a 2011 Justice Department decision allowing states to legalize the games
within their borders.”
Online Gaming vs. Casinos: Research Finds a Casino Advantage
Studies indicate that Internet gamblers
exhibit a remarkable amount of restraint in
their gambling habits. “From these studies,
a prominent, unifying theme emerged: In
each gambling category, the vast majority of players gambled infrequently and
in moderation, while a small subset of
players (between 1 percent and 5 percent)
exhibited intense gambling behavior that
far exceeded that of the rest of the sample.”
New Kentucky lotto game exceeds
profit expectations
The Kentucky Lottery’s new keno
game hasn’t attracted as many retailers
as projected, but sales have exceeded
expectations. “Kentucky Lottery Chief
Financial Officer Howard Kline told The
State Journal (http://bit.ly/1xym6t7) that
the bingo-style game, which has drawings
every five minutes, sold $28.5 million in
wagers as of June 21. He says that’s about
$500,000 more than estimated.” They had
272 Keno-only retailers sign on to offer the
game by the end of May. “Lottery officials
initially had anticipated having 400 Kenoonly retailers by the end of June.” The
lottery had reached out to less traditional
venues such as bars and restaurants, hoping to play towards keno’s strength as a
more social form of gaming.
European Court of Justice:
Schleswig-Holstein Gaming Law does
not Affect Other States
Gibraltar-licensed online gaming firm
Digibet suffered a blow when the European Court of Justice (ECJ) ruled that the
more liberal gaming policy adopted by
the German state of Schleswig-Holstein
does not obviate federal German regulation. “The ruling was issued in response to
a request from Germany’s Federal Court
for clarification on whether SchleswigHolstein’s liberal gambling policy may
affect the prohibition on games of chance
in the other German states, as they relate
to European Commission rules on the
freedom to provide services. The German
Federal Court case involves Digibet and
state lottery operator Westdeutsche Lotterie (WestLotto), which had secured a court
ruling ordering Digibet and its managing director Gert Albers to cease offering
games of chance via the internet to players
in Germany.”
Iowa Lottery CEO:
Mobile Gaming has More Potential
than Internet Gaming
Iowa Lottery CEO, Terry Rich says “I’m
not as interested in internet gambling as
mobile gaming — being able to utilize a
cellphone on a one-time purchase … Our
big thing is, it needs to be kept within state
borders and controlled by our state legislators — not by somebody nationally or
somebody in Las Vegas controlling whether
we do or don’t do it.”
“We’ve done a lot of research, we are
ready … when the demand is there. And
I think the demand comes from the 25 to
31-year-old demographic.”
European Commission Calls
for Online Gambling Addiction
Warning Labels
These messages would be similar to
those displayed on cigarette packets and
would be placed on advertisements for
gaming products. Similar initiatives are
already taking place in many countries.
46
In France a help line number and health
warning message are present on all igaming websites and advertising. Supreme Court Passes on New
Jersey Sports Betting Case
According to 1992’s Professional and
Amateur Sports Protection Act, sports betting is legal in four states: Nevada, Oregon,
Montana, and Delaware. The state of New
Jersey has long lobbied for sports betting
to be allowed in its Atlantic City casinos.
Lawmaker Raymond Lesniak has introduced legislation that would remove gaming restrictions from New Jersey books, in
defiance of federal law. Lesniak compares
such a move to marijuana-legalization laws
recently enacted in Washington and Colorado—laws which the federal government
has chosen to ignore for the time being.
A financially beleaguered Atlantic City is
eager to utilize legalized sports betting.
“It is estimated that over $500 billion is
wagered on sports illegally in the United
States each year. Las Vegas casinos have
had sports betting since the 1970’s. As
more and more states surrounding New
Jersey legalize table gaming, Atlantic City
and New Jersey’s racetracks are beginning
to feel the pinch.”
Aristocrat Acquires Video Gaming
Technologies
Gaming machine and casino management systems firm Aristocrat has will
purchase US competitor Video Gaming
Technologies (VGT) for under $1.3 billion
(€941.8 million). This deal will increase the
Australian firm’s share of the US industry
from 5% to about 31%. VGT makes slot
machines for Native American casinos
as its main source of business. Aristocrat
has also acquired Paltronics, an Illinoisbased supplier of gaming products and
systems. “Paltronics provides a range
of value-added applications for in-game
media windows and bonus applications for
electronic gaming machines, video poker
and table games.”
43% of Spain’s Online Poker Players
Play on Illegal Websites
This is according to research from
Spain’s CODERE Foundation and
the Institute of Policy and Governance of
Madrid’s Charles III University. The
report, Social Perception on Gambling in
Spain in 2014, relates that “Spain is still
home to a very large community of online
gamblers … However, the financial crisis
led people to play less often than before
and to invest the money on [online] games
… The results of the research indicate that
that online gaming seems to have reached
a degree of maturity.”
Taiwan Sports Lottery May Earn
NT$500 Million more than expected
from World Cup
The lottery also attributed the increase
in revenue to a new diversity of betting
offerings, from NBA basketball games
and Major League Baseball games in
North America, to ATP tennis games in
Taiwan. Live betting has also been an
important new offering.
“Taiwan Sports Lottery Co president Ted
Lin said that its sales revenue last month
topped NT$2.57 billion, adding that the
company made NT$1.06 billion within 18
days after the World Cup began.”
Macau is Now the World’s FourthRichest Territorial Entity
Recently released World Bank statistics
show that the former Portuguese colony
has overtaken Switzerland in gross domestic product per capita, at £53,000. Luxembourg, Norway and Qatar are in the top
three slots. Tourists and gamblers from
mainland China have helped drive this
increase in GDP. The region is benefiting from the newly flush middle class of
China. Macau is the only place in China
where gambling is legal. Casino bosses
in Macau are actively investing in resorts, shopping malls, and elaborate stage
shows as the region is trying to re-position
itself as a family-friendly tourist spot. The
average bet is estimated to be £60. Macau
has over 30 casinos, including the world’s
largest, the Venetian Macau. New Mexico Lottery CEO Seeks
Change in Scholarship Funding
The head of New Mexico’s lottery
system, David Barden, wants the state
Legislature to cut the 30 percent minimum
it is required to provide in revenues to the
college scholarship program, arguing that
such a move could increase lottery sales
and create a larger revenue stream. The
Legislative Lottery Scholarship program
provides tuition money at state-funded
institutions. The New Mexico lottery
system says it has raised more than $610
million for education. The Santa Fe think
tank, Think New Mexico, argues that the
lottery could increase its sales by reducing
overheard, but lottery officials reply that
they have nowhere left to cut.
Singapore to Cease Issuing $10,000
Banknote in Money Laundering Prevention Move
High denomination notes are popular
with criminals as they are a lighter, more
efficient way of transporting large amounts
of cash. Ong Chong Tee, a deputy managing director of the Monetary Authority of
Singapore (MAS), said that ending the
$10,000 note was unlikely to cause any
major issues: “The development of more
advanced and secured electronic payment
systems has reduced the need for large
value cash-based transactions,” he said at a
recent financial crime seminar. This speaks
to the fact of just how big a problem that
money-laundering has become. Casinos are
being required to strengthen their systems
for monitoring transactions in order to
prevent money-laundering.
Casino Revenues Down: Moody’s
Reports Declining Outlook for U.S.
Gaming; Effect on Connecticut
Gaming revenues are down at casinos across the U.S., including Connecticut. “We now estimate that total US
gaming revenues reported by state gaming
authorities will decrease between 3.0%
and 5.0% during the next 12 to 18 months,
causing overall industry [earnings before
interest and tax] to decline between 4.5%
and 7.5%,” Moody’s analyst and Senior
Vice President Keith Foley wrote. Connecticut was among the states with the
biggest percentage decline. “In Connecticut, total gaming revenue was down 10.9
percent in March to $96.5 million; down
11 percent in April to $86.5 million; down
7.6 percent in May to $95.4 million.”
Moody’s report argues that the market
has becoming “diluted with new and expanded gaming facilities in the Northeast
47
and elsewhere.”
“Connecticut had the second biggest
drop in gaming revenue for March after Indiana, and the largest drop in April. Many
other states also had declines in gaming
revenue for at least two of the three months
that Moody’s looked at: Colorado, Delaware, New Jersey, Illinois, Kansas, Indiana, Iowa, Michigan, Louisiana, New York,
Missouri and Pennsylvania, for example.” Iowa Lottery: Strong Results
this Year
The Iowa Lottery will have solid results
this year, CEO Terry Rich stated, “but
the brutal winter definitely had an impact
on the sale of many consumer products,
including lottery tickets … Repeated blizzards and frigid temperatures often made
it impossible for folks to get out and about
this winter in Iowa, and when people
aren’t in their normal routines, they often
don’t make their usual purchases, including lottery tickets,” he said. The Iowa
Lottery reported that it had $174.2 million
in lottery sales, down from $186.6 million
the previous year.
Hoosier Lottery’s New Private
Operator Attains Record Sales
—Over $1B
The Hoosier Lottery’s new private operator GTECH Corp, brought in record sales
revenue of more than $1 billion. However
state lottery officials also reported that they
will likely fall short of the $256 million
promised to the state when it won the contract to operate the state lottery in October
of 2012. “The state’s contract requires
the company to make up the difference if it
falls short of its income commitment.”
Delaware House Passes $9.9
Million Casino Relief Bill
Dover—Delaware’s three casinos will
get $9.9 million taxpayer dollars in a
casino relief proposal passed by the state
House. Senate Bill 220 was passed by a
vote of 27-10. “SB 220 was contingent
upon a companion bill’s passage, that
reauthorizes unused funds for the first
year. The bill mandates that $3.2 million
in funding earmarked for the Kent County
Sports Complex and $1.1 million in unspent new jobs infrastructure fund as well
Pulse
of the
Industry
Continued …
as $5.6 million left over from last year’s
bond bill allocation can be used for the
$9.9 million this year.”
Tatts Group Wins AUS $450 Million
Compensation from State of Victoria
Australian gaming group Tatts will be
awarded more than $451m (£249.6m) in
compensation, arising from the expiration
of its gaming operator’s licence. The provider has also reached an agreement with
the Queensland Government and Racing
Queensland (RQ) to establish a new regulatory framework for the operation of race
and sports wagering. The new deal will
extend Tatts’ sports wagering licence by 61
years and bring into line the race wagering
licence, both terminating on 30 June 2098.
“Retail exclusivity has been secured for a
further 30 years under each licence, until 30 June 2044 … Tatts will pay the State
$150m (£83m) as a license fee, to be paid
in four equal instalments in July 2014,
2016, 2020 and 2023. In addition, RQ and
Tatts have agreed to form joint ventures in
the future on a number of initiatives that
will generate potential additional revenue
for the racing industry.”
KKCG, Emma Capital and GTECH
Seek Turkish Lottery License
A consortium of Czech investment firms
KKCG and Emma Capital, and the Italian gaming company GTECH, have filed
for a license to operate Turkey’s national
lottery, Milli Piyango. The consortium
stated in May that it intended to make a bid
and may include a Turkish partner in the
deal. “KKCG and Emma Capital, part of
the Emma Group owned by Czech investor
Jiri Smejc, joined together with other investors last year to buy a controlling stake
in Greek betting monopoly OPAP , the first
major privatization under that country’s
international bailout plan.”
Cambodia to Change Gaming Laws
to Attract Major Casinos
Cambodian regulators are considering opening up the casino market to new
operators. Online gambling could also be
included. Gaming is highly popular all
across Asia, and thus the country has great
potential, particularly because of its lower
tax rates. “Last year, Cambodia was visited
by 4.2 million tourists, according to information released by the state’s Ministry
of Tourism. More than 20% of these came
from the neighboring country of Vietnam.
China is the second largest source of tourists, accounting for 11% of the number of
annual visitors … So far, the Economy and
Finance Ministry has awarded 56 casino
licenses for 7,660 slot machines and 2,568
gaming tables across the country. In 2013,
the state earned US$22 million from gambling-related activities, which means the
local market has a significant potential.”
Proposed UK Gaming Laws Challenged by Gibraltar Betting and Gaming Association
The GBGA argues that introducing laws
that require all operators to apply for a license from the UK Gambling Commission
is a breach of European law. “The likely
impact of this legislation will be to drive
UK consumers towards unregulated or
poorly regulated operators, leaving them
exposed to unnecessary risks,” said Peter
Howitt, the chief executive of GBGA. Gibraltar’s government is encouraging
the challenge, concerned that the 15% tax
and new regulations could encourage UK
bookies to relocate back to Britain. PGRI
Comment: Operators based in tax havens
like Gibraltar and Malta are constantly
complaining about anything and everything the member states do to regulate and
tax i-gaming. Their mission appears to be
to convince the EU Commission to force
all EU member states to de-regulate the
industry with the result that all i-gaming
revenues will flow out of the nations that
have a tax rate higher than these remote
operators deem to be acceptable, which is
about 1%.
Trinidad & Tobago Gaming
Commission to Assist Racing Industry
The regulation of the racing industry, along with private betting shops, is
expected to change by the New Year, in an
effort to revive the industry. “In the past,
licensing of betting shops was handled by
48
the chief magistrate and the BLB collected
the taxes, but in future it will be under the
umbrella of the Commission. The legislation will also be expanded to provide for
the licensing of corporations as bookmakers, which the existing legislation does not
provide. In such cases, due diligence will
be extended to board members, related
companies and interlocking directorships.”
USA Today Article: Online Gaming
Revenue Less Than Expected
Payment processing has been a problem
for the emergent gaming sector. Some
players have run into problems when banks
that issue credit cards have blocked attempts to gamble online. Some credit card
companies have declined to allow their
cards to be used for online gaming. “A research report released by Morgan Stanley
in March estimated that about 60 percent
of online gaming transactions in New
Jersey were rejected and that about half of
those users did not make other attempts to
fund their accounts.” PGRI Note: This is a most informative article on the state of the U.S. internet
gambling industry. The revenues in all three
states that regulate i-gaming (New Jersey,
Delaware, Nevada) are far short of projections. And they are actually declining. GTECH, Loto-Québec, British
Columbia Lottery to Launch MultiJurisdictional Bingo
GTECH S.p.A. has announced that its
subsidiary GTECH Sweden Interactive AB
(GTECH) has entered into an agreement
with the Societé des Lotteries du Québec
(Loto-Québec) and the British Columbia
Lottery Corporation (BCLC) to provide
interactive bingo software, games, and
related services to these Canadian lotteries
through June 2018. The contract represents
North America’s first government-regulated interactive bingo network. GTECH
will host from its Montreal, Canada Data
Center, while associated live chat and call
center services are based at its National
Operations Center in Toronto, Canada.
On May 14, 2014, BCLC updated and
launched new interactive bingo games on
its PlayNow.com site. Through a separate
agreement between BCLC and Manitoba
Liquor & Lotteries, PlayNow.com and its
content are also available to Manitoba residents. Loto-Québec’s Espacejeux.com site,
available in both French and English, has
been providing interactive bingo games to
Quebec residents since June 12. “GTECH
is proud to launch another industry first
with Loto-Québec and BCLC in the
government-sponsored interactive space
in North America,” said Jaymin B. Patel,
President and CEO, GTECH Americas.
“The Canadian Bingo Network will ensure
that players have a legal, safe and fun experience, and that proceeds from interactive bingo in these Canadian provinces will
remain in their communities.” GTECH’s
games provided through this agreement,
including the Canadian debut of PopCap
Games’ Plants vs. Zombies® Bingo, are
only available to adult residents of British
Columbia, Manitoba and Québec. The
network offers a full range of responsible
gaming control and prevention measures.
Mobile Gaming in China’s
Internet Economy
Since the Chinese market is huge, online
games can potentially be highly profitable,
particularly in the mobile sector. But the
market is highly crowded, with over a hundred games being released a day. Working effectively with app stores and social
media is key. China one of the largest
markets in the world with over 490 million
users and worth RMB 83 billion ($13.7
billion) in revenues. China’s mobile games
market is expected to double in size this
year to RMB 17.85 billion ($2.8 billion). It’s quickly stealing market share from traditional PCs as users shift to smart phones
and tablets to discover new and engaging
content. Nearly 460 million people are going online through mobile devices instead
of desktop computers. Bovada (Bodog) No Longer to Serve
Nevada And Delaware
After withdrawing from Washington,
Maryland, New York, and New Jersey,
US-facing online poker site Bovada has
now added Nevada And Delaware to its
list of excluded US states. “It is believed
Bovada’s exit from six US states represents an attempt by the company to head
off potential litigation from authorities
further on down the line … and not fall
prey to the fate of companies like PokerStars which, though chomping at the bit
to enter the legal and regulated US online
market now, have so far been prevented
from doing so in the three legal states due
to its ‘bad actor’ designation for postUnlawful Internet Gambling Enforcement
Act (UIGEA) behavior.”
National Association of Convenience Store supports proposed
online gaming ban
“The National Association of Convenience Stores (NACS) will back a major
public affairs campaign aimed at encouraging Congress and association members
to support a proposed online lottery and
gaming ban, reported Politico.” Lyle
Beckwith, NACS senior vice president of
government relations says that “Lottery
tickets should not be sold interstate on the
Internet. Those sales risk letting kids buy
them, letting people gamble in states that
don’t want gambling, and pulling money
and sales out of some states into others.
… If Congress does not act to pass this
legislation, states will open the floodgates
to Internet gambling and it will become
difficult or impossible to turn it back.” PGRI Note: Of course, NACS needs
to resort to these ridiculous assertions and
scare tactics. Notice that the claims they
make are not true, that these are social
issues that NACS members are not actually concerned about anyway, and that
the actual concern of NACS members is
not even stated here. NACS just wants to
protect their distribution monopoly over
lottery products. Of course, they can’t say
that because the U.S. Congress is not supposed to take legislative action to protect
monopolies. The U.S. Congress is not
tasked with the job of denying consumer
rights to choose, the rights of consumers to
buy online. Congress not supposed to take
legislative action to require that a product
be made available only in retail stores
because store-owners want to protect their
distribution monopoly—The notion that
NACS’ actual agenda is to pressure the
U.S. Congress to intervene to prevent the
natural disruptions in a dynamic marketplace by protecting their monopoly and
denying consumers the right to choose is
not a political platform and legal strategy
that would work.
49
Amaya to acquire Rational Group
(Owner of PokerStars and Full
Tilt Poker)
PokerStars, the world’s biggest online
poker company, will sell itself for $4.9
billion to Amaya Gaming, a Canadian
supplier of gaming equipment. PokerStars
had major problems with law enforcement
authorities in the US. “In 2012, PokerStars
struck a $731 million settlement with federal prosecutors that also saw the company
acquire the assets of Full Tilt. The company did not admit any wrongdoing. [Its
founder, Isai] Scheinberg remained under
indictment and has not come to the U.S.
to face the charges.” PokerStars however
dominated online poker in the rest of the
world. “The company posted revenues of
$1.1 billion last year and earnings before
interest, taxes, depreciation and amortization of $420 million.” But when it comes
to the US, other companies have been able
to enter the limited market space for online
poker ahead of them, and thus the owners of PokerStars best option was to sell.
Amaya said it believes the “transaction
will expedite the entry of PokerStars and
Full Tilt Poker into regulated markets in
which Amaya already holds a footprint,
particularly the U.S.A.”
Loto-Québec to License, Regulate,
and Tax Online Poker
The lottery corporation now plans to offer a license to sites such as Poker Stars, in
return for what is expected to be quite rich
income. “Montreal-based Amaya Gaming
Group, which bought Poker Stars and Full
Tilt Poker last week to $ 4.9 billion, could
be the first company to receive such a
license. The company is already a supplier
of Loto-Québec for devices in casinos.”
NC Lottery Official: Budget Writers Knew Restrictions on Ads Would
Reduce Income
PGRI Note: Classic case of politicians’
unwillingness to support Lottery colliding
with their dependence on lottery funding
to make the budget work. And the lottery
director being caught in the middle with
the unenviable job of explaining the facts to
politicians who prefer not to accept reality. The interesting thing about this story is that
it is being played out on the public stage.
Pulse
of the
Industry
Continued …
Swiss Government Drafts Online
Gambling Bill
Switzerland is working towards finding
the right balance for casino operators and
residents who want to gamble online. The
government has now published a draft of
the newly
California Indian Tribes Reach
Consensus On Online Poker Bill
At issue were the number of licenses to
be granted and whether operators which
continued to offer i-gambling in violation
of the UIGEA.
American Gaming Association (AGA)
Drops Support for Online Gambling
The fight to regulate online poker and
gambling in the U.S. lost a major player as
the American Gaming Association (AGA)
has announced that it will no longer be
supporting the cause. Citing divisiveness
among the casinos it represents, AGA
CEO Geoff Freeman stated that the organization will cease lobbying efforts regarding
online gambling, referring to the matter
as “an issue that the association cannot
lead on,” the Wall Street Journal reported.
PGRI Note: This is a must-read for anyone interested in the politics of regulating
i-gaming, and the in-fighting among the
biggest casino operators, in the U.S.
Social Gaming Market could be
Worth $17.4 Billion by 2019
The growth (estimated be compound
annual rate of 16%) is driven by the rapid
adoption of smart phones, tablets and mobile devices. Watch for operators to merge
the extraordinary popularity of social
gaming with real-money games. Another
driver of the rise in social gaming is the application of “gamification” principles and
tactics as a marketing tool by main-stream
companies who sell non-gaming products
and services. Food and Bev and retail
industry are among the first to pursue this
new method of engaging consumers.
Republicans Sponsor a Bill to Ban
Online Gambling
articles are sometimes failing to make the
point that the Supreme Court declined to
hear the case as opposed to ruling that
states are in violation of federal law if
they legalize sports-betting. The distinction could be quite material, as it appears
that NJ is proceeding with regulating and
legalizing sports betting without a ruling
from the Supreme Court. That’s when the
U.S. Dept of Justice will need to decide
whether to sue the state of NJ to force
them to prohibit sports-betting. If that
happens, then this case may be referred
back up to the U.S. Supreme Court to
settle this question once and for all. At
issue is whether PASPA, the federal law
that prohibits sports-betting in all but
four states, is constitutional and would be
upheld in a court of law, with the ultimate
court being the U.S. Supreme Court.
Arizona Court Rejects Appeal of
Plaintiff Who Tries to Sue the Operators of an Off-Shore Internet Gaming
Site for the $800,000 He Lost
New UK Gaming Regulation to be
Challenged in Court
Hopefully, state attorney generals,
legislators, and governors will step up to
defend the rights of states to regulate and
tax the gambling industry, including internet gambling. To do otherwise would set
a dangerous precedent of transfer of all
manner of trade and commerce legislation
over to the federal government. The “Restoration of America’s Wire Act” would
rewrite the Federal Wire Act of 1961 to
criminalise all “wire” communications
related to gambling. “Not only does the
proposal trample states’ rights, it will fail
to eliminate illegal online gambling while
making consumers less safe online, eliminating millions of dollars in tax revenue
for states, and favoring a special interest.
It is also based on a blatant misrepresentation of existing law.”
The judge stated that state racketeering
laws do not protect gamblers, even when
they play on illegal off-shore gambling
sites. “Gambling is a voluntary activity
and therefore does not qualify as an injury
to person.”
INTRALOT Signs Amendment to
Extend its Contract with the New
Hampshire Lottery
Commission Charlie McIntyre, the
Lottery’s Executive Director, commented:
“New Hampshire was the first U.S. state to
start a lottery in modern times (1964). We
are now celebrating 50 years of successful
operations. Since INTRALOT converted
our systems, lottery sales have increased
by more than 20% and we very much look
forward to continuing that trend during
our partnership through 2020. Over the
past four years, INTRALOT has provided
excellent service and created tremendous
value for New Hampshire citizens and for
the New Hampshire Education Trust Fund.”
Supreme Court Rejects Gov.
Christie’s Appeal to Legalize Sports
Gambling in New Jersey
PGRI Note: This is not a legal opinion
that ends all debate on this issue. News
50
“The Gibraltar Betting and Gaming Association (GBGA), which represents companies such as 32Red and Victor Chandler, is to take legal action against the
UK government over new licensing and
tax rules due to come into force later this
year.” The association argues that the new
rules violate European law and could
expose British players to “unscrupulous
operators.” “From December 1st all online bets placed in Britain will be subject
to a 15% ‘point of consumption tax’ which
is expected to bring in around £300 million each year to the Treasury.”
The Chief Executive of the GBGA, Peter
Howitt, said, “The likely impact of this
legislation will be to drive UK consumers
towards unregulated or poorly regulated
operators, leaving them exposed to unnecessary risks.”
PGRI Note: Disingenuous in the
extreme to claim that the only way to
protect consumers is to lower the tax rates.
Everyone, from NACS (see story above) to
remote i-gaming operators, tries to cloak
their own transparently self-serving financial agenda with this concern for the safety
of the consumers. Presumably, legislators
across the world see through this ruse.
Report: Mobile Gaming To Be $28.9
Billion Market By 2016
Mobile game revenue will grow by 38
per cent over the next two years as gaming
firms adjust their strategy to take advantage of new opportunities. The figures are
from a Juniper Research report “Mobile
& Handheld Games: Discover, Monetise,
Advertise 2014-2019.” “Tablet users are
set to spend more on in-game purchases
and generate more revenue per device than
smart phone owners due to the enhanced
performance and graphical capabilities
the larger devices have. This means that
consumers using traditional portable gaming devices are being persuaded to move
over to tablets at a faster rate than before.”
Rising disposable income combined
with smart phone adoption will result in
increased in-game purchasing in Latin
America, Eastern Europe and Southeast
Asia. App stores remain the primary content discovery location. u
Connecting with a New Generation of Consumers
Our Miami conference, Lottery EXPO 2014, will be held
at the Eden Roc Miami Beach Hotel on September 9th,
10th, and 11th. We promise to deliver a uniquely rewarding conference experience, with world-class speakers and
a forward-looking program. So please mark your calendars
for Lottery EXPO 2014. Registration is FREE for all Lottery
personnel. We look forward to seeing you there!
public gaming
research institute
www.PublicGaming.org: Conferences details, updates, and registration information.
www.PGRItalks: Video-recording site, to view presentations from past PGRI conference events.
www.EdenRocMiami.com: Reserve your room at Lottery Expo (only $199 until room block sells out).
www.PublicGaming.com: News Website carries the most up-to-date lottery, gaming, and
regulatory news of the industry.
Pantone 152 U
The New Customer Journey … continued from page 39
Pantone 282 U
Hexachrome Yellow
the customer, fix the problem and make sure it doesn’t happen again.
Last but not least, don’t forget to be agile. The recent financial crisis, the new available technologies are just some examples of changes happening in our environment that affect our customers’ purchase
decisions. A prerequisite to being agile is to be willing to change.
At INTRALOT, we are seeking innovation and change all the
time. Our technologies, products and services are evolving to embrace new opportunities exploring the new customer journey model.
Our newest Lottery Mobile solutions as well as our newest interactive DreamTouch terminals are examples of innovative products that
have been built with this new model in mind. Our vision is to keep
on changing traditional lotteries by following new player behaviors
and offering them the best entertainment experiences. u
nificantly increases revenue for your beneficiaries.
Create winners’ awareness
What better way to showcase your support to the local community
than by posting on your site about the prizes people win every single
day. Add videos and pictures of winners sharing their experience.
Share them on your social media pages. Put emphasis on the fact
that they are ordinary people like you.
Put your customer at the center
Losing sight of the customer and separating yourself from what is
happening outside is one of the primary reasons corporations stumble
in the first place. You need to create an open dialogue and really know
the good, the bad and the ugly. Then work with your team to talk to
51

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